AppNexus Twixt_Automated Guaranteed_Whitepaper_FINAL

Automated Guaranteed:Recasting the relationship between digital media teams and technology

INTRODUCTION

THE STATE OF DIGITAL MEDIA BUYING

TWIXT MEDIA BUYING SURVEY

MEDIA TEAMS WANT TO DELIVER MORE VALUE TO CLIENTS

AUTOMATED GUARANTEED

MEET TWIXT – MEDIA BUYING SIMPLIFIED

AUTOMATED RFP PROCESS & NEGOTIATION

SIMPLIFIED REPORTING

EXECUTION / AUTOMATED TRAFFICKING

SUMMARY

ABOUT US

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TWIXT – AUTOMATED GUARANTEED 02

[email protected] | appnexus.com/twixt | ©2015 AppNexus Inc. All Rights Reserved.

TABLE OF CONTENTS

mailto:twixt%40appnexus.com?subject=Twixt

http://www.appnexus.com/twixt

INTRODUCTION

In 1965, Gordon Moore, one of the inventors of the integrated circuit (a.k.a. computer “chip”) and co-founder of Intel, observed that the number of transistors per square inch on integrated circuits had doubled almost every year since the integrated circuit was invented. Moore hypothesized that this trend would continue for the foreseeable future. And it has; Moore’s hypothesis has become Moore’s Law. In layman’s terms, Moore’s Law means that computers get twice as powerful (at the same cost) every 18 months. Sometimes visibly, sometimes not, Moore’s Law describes the underlying dynamic transforming our daily experience, driving rapid evolution in the way we live, work, communicate and collaborate.

The automotive industry provides a variety of examples of Moore’s Law in action. Electronics contribute 90% of innovations and new features in modern automobiles, from the obvious entertainment, navigation and connectivity systems to less obvious engine management, fuel economy and safety systems. And we’re not even talking about self-driving cars yet! Viewed another way, electronics now represent 30% of automobile production costs on average. In 1980 that was only 2%.

Just as importantly, but less visibly to most consumers, Moore’s Law has remade the automotive manufacturing process —Just In Time Manufacturing or “JIT”—by which cars are made. JIT manufacturing comprises a series of processes aimed at increasing efficiency while reducing overall production time. Manufacturers using JIT are able to lower error rates and costs through a combination of automation, information sharing and empowerment of human workers throughout the production process.

That last bit is important; workers see direct benefits in JIT-enabled environments, too. Workers are encouraged to receive training and develop multiple skills that enable them to move across different teams as needed, thus increasing their value. JIT was also a catalyst to transform suppliers from “vendors” into “partners”, because of the necessity of syncing supply with variable demand. JIT was such an important and positive innovation that all auto manufacturers (indeed the vast majority of manufacturers in general) have adopted it.

TWIXT – AUTOMATED GUARANTEED


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https://en.wikipedia.org/wiki/Moore%27s_law

https://en.wikipedia.org/wiki/Autonomous_car

https://en.wikipedia.org/wiki/Just-in-Time_Manufacturing

https://en.wikipedia.org/wiki/Just-in-Time_Manufacturing



As Moore’s Law worked its magic, automobile manufacturers combined JIT processes with programmatic automation software, called Enterprise Resource Planning (or “ERP”), to dramatically improve the model. JIT requires information sharing between teams up and down the supply chain – the faster and more detailed, the better. ERP enables auto manufacturers to see real time data on every aspect of the manufacturing and distribution process – right down to the actual sales in dealerships. A key advantage to ERP is that people in different departments are able to view and interact with the same information. This insight and automated workflow has enabled disparate teams to work more efficiently and effectively than ever before.

Just as Moore’s Law transformed the global auto industry, it is repaving Madison Avenue.

Examples of technology’s impact on media consumption are myriad and ubiquitous. As with the automotive example though, Moore’s Law is also hard at work behind the scenes. In less than a decade, an “ad tech” revolution has created a dynamic, liquid, automated and transactional environment for buyers and sellers – a new way of buying digital media that is generally referred to as Real Time Bidding (or “RTB” for short).

RTB uses software and computer processing power to electronically execute trades, the trades being the result of auctions of individual digital ad impressions in real time as the impressions are created. RTB is pretty amazing. It’s a tremendous innovation and a perfect applied example of Moore’s Law. It has been a key catalyst to increasing supply chain efficiency, improving results and better matching demand with supply in the digital media market.

But it’s only one part of a bigger story yet to be written.

The substantial majority of most digital media budgets are still planned and executed the old-fashioned way. That is, by hand. The history of other industries suggests that manual processes are ultimately no match for Moore’s Law. And sure enough, we find Moore’s Law beginning to engage on direct buys themselves. Echoing the transformation that took place in automotive manufacturing processes, automated workflow technology is emerging to give buyers and sellers more insight, more visibility up and down the supply chain, better tools for collaboration and generally more time to do the things they are experts at doing.



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https://en.wikipedia.org/wiki/Enterprise_resource_planning

https://en.wikipedia.org/wiki/Enterprise_resource_planning

https://en.wikipedia.org/wiki/Real-time_bidding



It’s important to note that, similar to the automotive example, these are human beings using computers not as replacements for themselves, but as improvements to themselves. These are computerized tools that let people leverage their unique skills and talents.

Augmentation, not just automation.

This is an increasingly common theme in popular dialog. During his TED Talk, best-selling author and MIT professor Erik Brynjolfsson describes how “racing with the machine beats racing against the machine.” He tells the story of the 1997 match between Garry Kasparov, the Russian world chess champion, and IBM’s supercomputer Deep Blue. Kasparov lost the match, the first defeat of a reigning world chess champion by a computer under tournament conditions. But from this loss, Kasparov gained a valuable insight. He speculated that a team of players collaborating with an inexpensive computer and simple chess program could beat any human chess-master or supercomputer. He was right. In formal tournament settings, human/machine chess teams have so far beaten any computer or human working alone.

The win-win collaboration between chess players and computers is a powerful example for the media teams of today. Today’s planners and buyers can choose to race with computers, using software to collaborate and become more efficient and effective at delivering results for advertisers rather than spending their time performing repetitive manual steps that can and should be automated out of their way. They can use technology to compete against their client’s competitors in the arena of driving customer behavior and profits rather than competing with technology in the arena of completing repetitive tasks. The former is where client value is created and personal growth is achieved. The latter is an unfulfilling and ultimately futile pursuit.

This paper will explain how media teams can work with Automated Guaranteed technology to deliver more value for clients.

“RACING WITH THE MACHINE BEATS RACING AGAINST THE MACHINE”—Erik Brynjolfsson, MIT Professor and bestselling author of “The Second Machine Age”



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http://www.ted.com/talks/erik_brynjolfsson_the_key_to_growth_race_em_with_em_the_machines?language=en



REPETITIVE PROCESSES IN DIRECT BUYING TODAY

RTB has been the primary focus of digital ad market participants (and investors) in unleashing the power of Moore’s Law on Madison Avenue and this new technology has been nothing short of transformative. Since its commercial introduction in 2009, RTB’s share of the ad spending market has risen steadily across every form of digital “Display” advertising, which as we use it throughout this paper encompasses desktop, mobile/tablet and digital video. According to IDC, US digital Display ad spending reached $20 billion in 2014. Of that $2.9 billion was executed via RTB. By 2018, IDC estimates that US digital Display spending will reach $39 billion, with $7.1 billion being executed RTB. That’s $0 to $7B, approaching 20% of all Display spending, in less than a decade.

Clearly, RTB is an incredible innovation but it’s also only part of the equation. After all, what about how

media teams plan and buy guaranteed inventory? Has the ad tech ecosystem provided a similar level of improvement to those processes as well? The answer is no. For the majority of digital Display budgets, campaigns are planned, purchased and executed in much the same way they were when the first display ad was sold - way back in 1994.

As the graphic below illustrates, the direct buying process is still largely comprised of repetitive tasks like exchanging emails to send and answer questions on RFPs, cutting and pasting excel and PowerPoint proposals together, manually tracking and re-integrating revisions as planning and negotiation progresses, and uploading various documents to multiple platforms—all of this for each media property on a plan. It’s an inefficient, time-consuming, error-prone process.

THE STATE OF DIGITAL MEDIA BUYING

Client sets campaign budget

Agency develops concepts & execution plan

Budget allocated among different media

Digital buyers determines what sellers to RFP

Digital buyers creates RFPs and emails to sellers

Sales teams work with planning teams to create the best proposal possible

Buyer traffics campaign and sets live, but still has to send tags to publications, troubleshoot, etc. Campaign set live

Contracts and IOs signed after several rounds of revisions Digital buyer

reviews materials

Buyers requests information and changes

Sales changes all materials and resends





Make no mistake. This is not to say that buying direct is a bad thing—quite the contrary, in fact. Direct buying accomplishes things that can’t be done any other way. In assembling a direct buy, media planners discover and evaluate new media partners. They work with partners to vet innovative ad solutions and executions. They intelligently combine new and tested components into a strategically crafted and achievable media plan. They work with the client to define meaningful metrics specific to clients’ goals and objectives. (and about a million other things). Media planners and buyers are expert at this process and add a ton of value.

For example, the agency team for a leading quick-service restaurant marketer needed a way to measure success of a fantasy football sponsorship beyond what a click-thru rate was capable of conveying. Tracking a click to a purchase at one of the marketers 13,000 restaurants wasn’t a realistic success metric. The publisher and media teams collaborated to define a unique success metric based on an engagement metric. The unique measurement metric revealed higher than anticipated engagement times with consumers and was instrumental in defining program success. This is clearly a case where direct buying and smart media planners working together delivered a winning program with meaningful insights for all involved.

The relationships created through direct buying can also be a catalyst for developing creative ad products. For example, an advertiser may want a custom ad solution for a product launch. In many cases, publishers are willing to change a front page with a custom takeover, such as

synced ad units. The New York Times famously did this with Apple on several product launches. There are many more examples that demonstrate the importance of building meaningful one-on-one relationships between clients, agencies and publishers that RTB can’t replicate. RTB was never meant to replace the value of face-to-face meetings to marry creative ad concepts with savvy media strategy.

Finally, let’s not forget that delivery guarantees aren’t available via RTB. Marketer’s sales forecasts and manufacturing plans rely on outputs from marketing mix models that rely on media delivery as an input. Without predictable, guaranteed delivery the entire supply chain can be disrupted. Needless to say, large global marketers aren’t fond of surprises of this nature.

Clearly, the ad world needs good media planners and buyers! But here’s the problem: given that most digital media is still bought and sold directly using an antiquated manual process, media planners don’t have the time do what they’re best at. Like the automobile manufacturing teams before the days of JIT, media planners are hardworking, insightful human beings who are essentially forced to perform robotic tasks, versus adding value to the overall process and utilizing multiple high value skills.

Surely, there must be a better path. And fortunately, there is. Instead of chasing paper trails, buyers can use Automated Guaranteed technology to leverage their skills to help clients execute their visions.





TWIXT MEDIA BUYING SURVEY

As a team of media industry professionals, with diverse backgrounds spanning agencies, publishers, brands and ad-tech companies, we at AppNexus have seen first-hand many of the great innovations in media planning and buying (in fact, Brian O’Kelley, our CEO, is one of the inventors of RTB!) But we’re also keenly aware of the many areas of the process that have yet to achieve their full potential.

That was the main impetus behind our Twixt Media Buying Survey. Recently, the Twixt team at AppNexus asked over 500 agency digital media team members for feedback and insights about their current direct buying processes. We wanted to understand better their day-to-day pain points. We were also curious about the areas where they thought they could best streamline their workflows and, perhaps most importantly, what they could accomplish with the time they saved.

The survey was enlightening. First, we learned that media planners and buyers spend an average of three hours per day performing repetitive manual tasks. That’s about 30% of their time on average devoted to work that does not advance or leverage their strategic vision. More than a third of the sample was forced to waste even more time than that!

Q: HOW MANY HOURS PER DAY DO YOU SPEND ON REPETITIVE CAMPAIGN TASKS, LIKE TRAFFICKING OR RECONCILING DATA, INSTEAD OF DOING HIGHER VALUE ACTIVITIES FOR YOUR CLIENT BUSINESS?

8–10 hours/day

4–7 hours/day

1–3 hours/day Weighted Average: 3 hours/day

1 hour or less per day

3%

33%

35%

29%





Buyers told us that reporting and execution (I/Os, trafficking, etc.) were the most painful parts of the campaign life cycle but there was time wasted in a wide variety of different activities along the way.

Interestingly, the “other” bucket drew no responses; the survey appeared to correctly identify the major productivity drains and sources of frustration for media teams. The survey responses clearly describe a world where media teams are racing against the machine rather than racing with it.

Q: WHAT PART OF THE CAMPAIGN LIFE CYCLE WOULD SAVE YOU THE MOST TIME IF IT WERE AUTOMATED PROPERLY?

0%

10%

26%

29%

6%

16%

13%

Other

Optimization

Reporting

Execution

Negotiation

RFP Process

Partner Discovery





16%

55%

16%

13%

Learning more about my clients business needs

Researching and testing new partners/technology

Looking for new ways to improve existing process

Researching industry trends

MEDIA TEAMS WANT TO DELIVER MORE VALUE TO CLIENTS

The survey further revealed that managers and individual contributors were very much aligned in what they wanted to spend more time doing. Managers (unsurprisingly) wanted their teams to focus more on delivering results and insight to clients. Meanwhile, individual team members emphasized wanting to develop their skills as media professionals and expressed genuine, unprompted interest in delivering more value to their clients’ business.

Q: IF YOU COULD AUTOMATED THE REPETITIVE PARTS OF THE CAMPAIGN LIFE-CYCLE, WHAT HIGHER VALUE TASKS WOULD YOU PREFER TO SPEND TIME DOING?

Q: IF YOU MANAGE A MEDIA PLANNING/BUYING TEAM, WHAT WOULD YOU LIKE THEM TO SPEND MORE TIME DOING?

Optimizing, testing new products, doing lift studies, and providing client insights

› Learning the client’s business

› Learning about vendor capabilities —industry trends

› Optimizations and identifying areas for improvement

› Reading insights and planning campaigns

› Talking to vendors to understand market

› Brainstorming ideas/looking into new vendors or test opportunities

› Strategy

› Meeting with interesting partners, developing strategy





Even with these clear and aligned goals, busywork has a persistent habit of intruding upon these high-value tasks. As one media planner put it, she’s searching for a way for her team to save time and become more “proactive” at delivering value for their clients—rather than being in a constant “reactive” state.

“I WOULD LOVE TO FREE UP OUR TIME SO WE CAN MOVE FROM CONSTANTLY BEING IN REACTIVE MODE TO OPERATING IN A MORE PROACTIVE CAPACITY AND GETTING AHEAD OF THE TREADMILL.” —Media Planner, New York City

Imagine the possibilities if teams actually could spend less time on repetitive tasks. Teams racing with the machine would have more time to focus on developing more creative media strategies with media partners, and more meaningful metrics to measure success. They could deliver better media outcomes that better drive their client’s business objectives. In turn, their agencies as a whole could leverage these improved results to create more opportunities and win business away from competitors with teams stuck on the treadmill cutting and pasting their days away. Once again, teams racing with the machine win the day.





AUTOMATED GUARANTEED

Automated Guaranteed (or “AG”) is the key to unlocking the true potential of media planners and buyers. Just as the automotive industry (among many others of course!) has benefitted from innovation in process automation, so can the digital media industry.

Automated Guaranteed technology enables media buyers to automate their “traditional” workflow, making a team’s buying process faster, more efficient, and less error-prone. It gives media planners more time to deliver the most important benefits of direct buying: strategic media plans with delivery guarantees, working more closely with publishers and their agency counterparts to develop breakthrough concepts, and meaningful, insight-rich client interactions. All this gets accomplished without the headaches and inefficiency that plagues their current workflow. As a report from research firm IDC explains, “Implementing automated guaranteed…should be a no-brainer.”

IDC predicts explosive growth for automated guaranteed. The prediction is that by 2018 automated guaranteed will account for 56% of US programmatic spending and 53% of global programmatic spending.

2018 PROGRAMMATIC DIGITAL AD SPENDING

Source: IDC WW Programmatic Advertising Forecast 2015-2018, July 2015

World Wide TotalU.S. Total

$53 BILLION

$28 BILLION

53%

56%

Total Spend % AG Spend





Q: WHAT PART OF THE CAMPAIGN LIFE CYCLE WOULD SAVE YOU THE MOST TIME IF IT WERE AUTOMATED PROPERLY?

Twixt is the best in class automated guaranteed platform for the open marketplace.

We created Twixt to enable media teams to work more efficiently throughout the entire media buying process, so they can focus on delivering more client value in areas such as reporting, insights and partner discovery. We started by automating the RFP process, since we knew it was one of the most labor-intensive tasks for teams. Media teams using Twixt automated RFP spend less time shuffling emails, ad specs and spreadsheets. And because the entire process is contained in a single interface, teams are able to better collaborate with each other and track the

process and results—all in one place. Twixt is helping teams work more efficiently in their current media buying process, laying the groundwork for teams to excel in a fully automated guaranteed media landscape.

Twixt’s capabilities align to what media teams say they want from a unified buying platform solution. Twixt’s current capabilities address about half of the pain media planners and buyers are faced with every day. With the integration of automated trafficking capability seamlessly into Twixt’s user-friendly workflow (early 2016), Twixt will address nearly 80%. And we’re just getting warmed up!

MEET TWIXT—MEDIA BUYING SIMPLIFIED

CAPABILITIES

2016

Early 2016

0%

10%

26%

29%

6%

16%

13%

Other

Optimization

Reporting

Execution

Negotiation

RFP Process

Partner Discovery





AUTOMATED RFP PROCESS & NEGOTIATION

Twixt’s intuitive design makes it easy to use and efficient at managing all aspects of the RFP process in one place. Media teams using Twixt spend less time shuffling emails, ad specs, spreadsheets and more time delivering client value.





SIMPLIFIED REPORTING

Twixt’s ad server integration simplifies reporting, so media teams spend less time shuffling data in Excel and more time delivering insights to clients.





EXECUTION / AUTOMATED TRAFFICKING

Over the coming months, Twixt will be integrating with Yieldex Direct to deliver a complete automated guaranteed buying solution. Trading desk programmatic products, holding company preferred deals and open RFPs in one unified application.





SUMMARY

2015 marks the 50th anniversary of Moore’s Law. Five decades on, this technological tsunami continues to transform our world, as exponential growth in computing power unlocks human potential across almost all fields of human endeavor. Madison Avenue has already witnessed the impact of Moore’s Law in the rapid rise of RTB—and we’re about to see it again in as Automated Guaranteed adoption accelerates.

Across a variety of industries and applications, the marriage of fast-calculating machines with human insight has proven—time and again—to be a value-added formula that wins the day. Instead of “racing against the machine” like Garry Kasparov in 1997, with Automated Guaranteed technology media planners and buyers are now able to “race with the machine” in service of the greater good of their agency and clients.

The advancement of Automated Guaranteed will free cycles for media planners and buyers to spend more time with clients, better understanding objectives and defining meaningful metrics for success. It will help augment media planners and buyers’ skills, allowing them more time to think strategically with media partners and adapt to feedback to deliver better outcomes.

In the media market of the future, the winners will be those who most effectively combine people and technology to drive results. We hope this report provides a useful perspective on the trends that will shape this market and how Automated Guaranteed technology like Twixt can be employed to help media teams get the most out of their unique skills.

Happy racing!





ABOUT US

Twixt is a complete media buying solution that gives media buyers access to Trading Desk programmatic products, holdco preferred deals and automated guaranteed, coupled with the ability to RFP for custom solutions and/or new partners in a seamless, integrated manner.

Twixt helps buying teams work more efficiently by streamlining repetitive and cumbersome tasks. Since RFP and campaign data lives in one place, teams using Twixt can continuously learn and improve from detailed buying history. With Twixt’s help, teams can focus on delivering deeper insights and stronger differentiation. Say goodbye to busy-work, like wrangling ad specs, shuffling spreadsheets, and emails.

Twixt’s intuitive user experience design means that learning Twixt is easy. We worked closely with media buyers and sellers to create an interface that enables buyers to onboard faster, and allows teams to ramp up quickly. And if you do need support, the Twixt support team is there for you with live reps and fast response times.

Visit appnexus.com/twixt for more information.

AppNexus is a technology company whose cloud-based software platform enables and optimizes programmatic online advertising. Our technology helps advertisers get the most out of their campaigns, publishers get the most out of their content, ad tech companies get the most of their insights and data, and internet users get full, democratic access to the digital world.

AppNexus exists to create a better Internet. In order to realize this mission, we’ve set our sights on building technology that can make digital advertising better, since ads are the very circulatory system of the Internet. They fund most of the great content we’re used to getting for free—from music, journalism, and film to games and instant information. They provide the means to innovate, investigate, and entertain.






DISCLAIMER

All rights reserved. The information contained in this white paper is believed to be reliable and current as of the date of publication, but accuracy cannot be guaranteed. Recommendations or forward-looking statements contained in this white paper are based on estimates of future results at the time of publication and are inherently uncertain. Actual results may vary materially from those expressed or implied in any such recommendations and forward-looking statements. AppNexus is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.





©2015 AppNexus Inc. All Rights Reserved.

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