PALO ALTO, Calif. – PubMatic, (www.PubMatic.com), a global ad revenue optimization company that works with thousands of premier online publishers and hundreds of ad networks, unveiled The 2nd Channel Ecosystem (http://www.PubMatic.com/AdRevenue2009), a detailed report and analysis of the primary segments that are driving up the value of premium online publisher ad inventory. The report defines the 2nd Channel as inventory sold through intermediaries such as ad networks and ad exchanges and reveals that in 3 years the 2nd Channel is estimated to make up 34% of all publisher ad revenue.
PubMatic worked with digital media consultant Bennett Zucker to conduct a series of interviews with online advertising executives in order to make the report a collaborative effort. The report was unveiled at PubMatic’s Ad Revenue 2009 conference to help premium online publishers better navigate the segments and companies within the 2nd Channel ecosystem as objectively as possible. The analysis is part of PubMatic’s annual report available via http://www.PubMatic.com/AdRevenue2009.
“With the vast amount of ad inventory going unsold and with confusion between the hundreds of networks, publishers and advertisers, there was clearly a need to help publishers understand all of their monetization options,” said PubMatic CEO, Rajeev Goel. “There may no longer be a useful distinction between the buy side and the sell side in online advertising, especially in the vast 2nd Channel. But there is a continuous need for innovation from every segment until we wring out all the inefficiency inherent in this complex business.”
The 2nd Channel Ecosystem is comprised of nine primary segments that are driving up the value of premium online publisher ad inventory including:
• Media Buying Platforms: Also sometimes referred to as “buy side optimization platforms,” this new segment within online display advertising works directly with ad agencies to improve efficiencies of working with ad networks and ad exchanges, including more precise audience targeting and improved campaign analytics.
• Dynamic Ad Creative Technologies: The companies in this segment have technology that changes an advertiser’s message to change depending on the user that is viewing it, allowing the messaging to be more personalized, and therefore improving campaign performance.
• Data Exchanges & Platforms: Marketplaces designed specifically to buy and sell data allow advertisers to buy specific audiences and publishers to earn revenue from data sales in this marketplace. While still in its relative infancy, this segment is trailblazing the way data is commoditized.
• Ad Networks & Targeting Platforms: The largest and most established of the segments within the 2nd Channel ecosystem, ad networks sell inventory that a publisher cannot sell themselves largely due to an excess of advertising inventory. There are several types of ad networks including vertical, behavioral, contextual, rich media, video, and more.
• Ad Exchanges: This segment is largely responsible for the evolution of how media is bought and sold. Ad exchanges offer publishers the ability to turn tough-to-monetize ad impressions into revenue by bringing market liquidity in the form of demand equal to the abundance of supply.
• Ad Servers: While not a new segment, ad servers are mission critical for publishers. Virtually every ad served is a result of multiple ad servers that work together in order to deliver and track ads in milliseconds.
• Ad Revenue Optimizers: Sometimes called ad network optimizers, this segment allows publishers to work with a large number of ad networks at one time. The segment also works with premium publishers to increase ad revenue leveraging various technologies, while also helping to protect the publisher’s brand by keeping unwanted advertisements off of their sites.
• Site Inventory & Sales Management Tools: Companies in this segment are often used to help online publishers package, price, and sell their inventory based on a number of complex variables including price forecasting and yield management.
• Measurement & Analytics: This segment is comprised of several smaller sub-segments including companies that check ad effectiveness through surveys, companies that verify campaigns to ensure the reporting is as accurate as possible, and analytical companies that help publishers to plan for future campaigns.
PubMatic provides online publishers with a full service solution to manage and monetize unsold ad inventory. PubMatic’s real-time ad price prediction technology and dedicated team service drive significantly higher revenues and simplify ad network management for more than 5500 large and medium publishers.