APT from Yahoo!: Unifying Digital Advertising
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- Sharyl Suzan Holland
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1 APT from Yahoo!: Issues Facing the Ad Industry and Yahoo! s Solution APT from Yahoo! is a superset of the best of what s offered by ad exchanges, ad servers and ad networks. Participants in the business of online advertising are struggling to buy and sell media in a fragmented market. The solution is APT from Yahoo!, an innovative new digital ad platform that is built specifically to bring the market together, to make buying and selling advertising simpler and more effective for everyone. APT from Yahoo! will change the way in which all participants publishers, advertisers, agencies, ad networks, developers and others connect with one another to deliver more relevant ads to consumers to drive business results. State of the Industry: Buying and Selling Online Advertising The online media world has fragmented, growing from a handful of properties to countless online destinations in a short time creating an advertising environment that is tougher for everyone. Publishers have to fight harder for their share of advertising dollars, while advertisers and agencies lack a simple, scalable way to reach targeted audiences. Ad networks struggle to maintain profit margins with ineffective monetization and challenges with differentiation. In order to chase down their audiences, agencies and advertisers spread their dollars across a wider array of properties, forcing publishers to manually consolidate enough high-quality inventory for large advertising demands. Additionally, publishers face increasing competition from ad networks who, in addition to grabbing a share of ad spend, have placed downward pricing pressure on ad inventory. 1
2 These market dynamics have forced publishers to waste too much effort on inefficient, manual operations. They manage multiple advertisers and multiple ad networks, armed with manual processes and spreadsheets. Sales forces spend a disproportionate amount of time trying to close deals on lower-value inventory, and then spend the balance of their time taking care of those advertisers. These inefficiencies spread throughout the organization, requiring resources from other groups as well. A fragmented market has created an advertising environment that is tougher for everyone. Publishers also face technology limitations, as they use outdated legacy ad management systems that were not built to handle the complexity of today s marketplace. The result is that publisher inventory is not realizing its full value, and money is being left on the table in the form of unsold or undersold advertising inventory. In this same environment, agencies and advertisers struggle to reach consumers who as a consequence of the proliferation of both media and platforms are even harder to engage. Advertisers and agencies are burdened with the time-consuming task of finding the high-quality inventory they need, and buying media from multiple publishers to get their required reach and relevance. Advertisers have a difficult time finding ad serving technology that provides them with the ability to deliver targeted communications to customers demographically, geographically, and behaviorally. Additionally, they often need to devote resources to play watchdog to their brand, carefully screening advertising opportunities to ensure their brand is being displayed in the contexts they desire. The business of online advertising is evolving As the media world evolved, the business of online advertising has followed suit in order to remain an effective means of communicating with consumers. In just a few short years, the industry has seen the rise and proliferation of ad networks, as service providers and aggregated supply sources. On an almost parallel path emerged the ad exchange, an auction-based marketplace between buyer and seller. 2
3 Ad networks make the business of advertising easier on advertisers and agencies by aggregating supply and demand, managing the buying and selling of media. This structure results in pricing models determined by the network, who make a profit re-selling inventory. Each network is its own closed ecosystem, so buyers and sellers are limited in supply by the networks they join. If they joined multiple networks, they have to manage multiple infrastructures. The ad exchange enables more relationships by creating an effective auction marketplace, providing agencies, advertisers, publishers and networks a direct line to buy and sell on their own. APT from Yahoo! is more like an exchange or a network in fact, it is more like a superset of the best of what s offered by ad exchanges, ad servers and ad networks. However, exchanges such as the Right Media Exchange have the potential for growth by connecting to the larger supplies of inventory and adding features such as guaranteed inventory and targeting support. The ad exchange enables more relationships by creating an effective auction marketplace, providing agencies, advertisers, publishers and networks a direct line to buy and sell on their own. These solutions create connections and efficiencies, but they fall short of providing the tools needed for the most effective online advertising business for today s complex marketplace. They can benefit from a new solution: a digital ad platform. APT from Yahoo! Helping us connect, buy and sell, and evolve APT from Yahoo! is a digital ad platform built from the ground up to usher in the next generation of digital advertising. APT from Yahoo! is more than an exchange or a network in fact, APT from Yahoo! is more like a superset of the best of what s offered by ad exchanges, ad servers and ad networks. It leverages the systems of the largest internet publisher, Yahoo!, and the first and largest exchange marketplace, the Right Media Exchange. It unifies the market connecting all players on a single platform and is designed to open up access to a massive amount of quality audiences and demand. It integrates and lets you manage multiple aspects of your business in a single system from guaranteed and non-guaranteed ad serving to the seamless integration of audience insights. It makes innovations, such as the ability to cross-sell and create new value, a core of the platform. 3
4 APT from Yahoo! was built to unify all participants while integrating the fundamentals of an ad business and the innovations that a more complex market demands. As such, it was created with specific benefits for each participant group, based on their greatest needs: For publishers, this platform is designed to open up access to massive demand and improve yield from all inventory, while simplifying ad management. It s also designed to help publishers create new revenue opportunities by cross-selling to increase supply. Advertisers and agencies will be able reach a large scale of quality audiences across multiple properties on a single platform, and harness insights on those users, driving better performance as they simplify media buying. Ad networks will gain access to more audiences and demand including Yahoo! and the largest ad exchange in one place, simplify the process of doing business with all of these partners, and expand revenue opportunities. Partners and developers will be able to bring their technologies, solutions and innovations to a vast marketplace easily, and help all buyers and sellers do business more effectively. Users will benefit as well, with a more relevant online experience. They ll see better targeted and more engaging ads APT from Yahoo! was built to unify all participants while integrating the fundamentals of an ad business and the innovations that a more complex market demands. These benefits are derived through a strategy to integrate four core components: technology foundation, relationship building, targeting, and contacts in order to deliver four core value propositions to all participants: Drive business results Simplify digital advertising Foster an open, innovative marketplace Provide a new level of flexibility and control 4
5 1 APT from Yahoo! is designed to drive business results. While earlier phases of evolution, including the ad network and exchange, provided ease and efficiency, the primary focus of APT from Yahoo! is on performance it s designed to help participants grow their businesses. Buyers will have the ability to reach a number of quality audiences across multiple properties with a single platform, with insights that can drive more relevant ads and better performance. Sellers will gain access to a large set of buyers both brand and performance advertisers driving up both demand and monetization. APT from Yahoo! will access a powerful repository of customer insights (from Yahoo! and its partners), which lets participants find more audiences and unlock inventory value through demographic, geographic, and interest-based targeting knowledge. 2 APT from Yahoo! simplifies digital advertising. Even with ad networks and the exchange, participants were finding the business of online advertising to be cumbersome and labor intensive, requiring many manual processes. APT from Yahoo! is built from the ground up to dramatically simplify the process of buying and selling digital advertising. It consolidates market participants and audiences on a common platform, thus requiring fewer points of contact and fewer disparate systems to reconcile. APT from Yahoo! brings together many functions of the digital ad business technology, relationship-building, targeting and controls so these functions no longer need to be managed separately. It automates what is reasonable to automate labor-intensive tasks like managing non-guaranteed inventory so businesses can concentrate on the things that demand their expertise. APT from Yahoo! accesses the largest repository of customer insights in the world (from Yahoo! and its partners), which lets participants to find more audiences and unlock inventory value through demographic, geographic, and behavioral targeting knowledge. 3 APT from Yahoo! fosters an open, innovative marketplace. To deliver the next phase of evolution, openness was a must. The basis of Yahoo! s solution is transparency: open access to partners, quality audiences and insights. APT from Yahoo! will bring participants into a large-scale, open, digital ad environment that reaches 85 percent of the US online market and sees more than 300 billion impressions a month*. APT from Yahoo! will let * Source: comscore Media Metrix, Worldwide Data 10/07 5
6 buyers and sellers connect to each other directly, and to buy and sell media more efficiently as a result. An open platform fosters innovations like cross-selling, allowing businesses to provide added value to their customers. 4 APT from Yahoo! provides a higher level of flexibility and control. Finally, Yahoo! s ad management platform is flexible, allowing participants to decide how much of the platform is right for them. They can tap into APT from Yahoo! to run many parts of their ad business, or use it for a single activity, such as reaching a specific audience, or accessing more demand for non-guaranteed inventory. APT from Yahoo! participants choose their business partners and can control how much they interact with others. APT from Yahoo! will allow sellers to set filters on what ads are appropriate for certain audiences; and buyers can set filters on where their ads end up with standardized ad and site classifications and filtering systems. With APT from Yahoo!, participants will connect seamlessly on a single, open platform and conduct their online advertising business effectively in one place. Summary With APT from Yahoo!, we take the next step in the evolutionary path of the business of online advertising while paving the way for future changes. APT from Yahoo! will provide businesses with the technology platform, relationship building tools, targeting options, and contacts they need for improved business performance in today s complex advertising market. With APT from Yahoo!, participants will connect seamlessly on a single, open platform and conduct their online advertising business effectively in one place. Businesses will be able to capitalize on the experience of Yahoo! a display advertising leader and the largest publisher on the web. Consequently, we believe APT from Yahoo! will help businesses drive the results they re looking for from better yield, to more responsive audiences, to a simpler way of doing business. 6
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