Ethical Advertisement Networks

Part
01
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Part
01

Ethical Advertisement Networks

Six insights into the overall outlook of the advertising exchange market have been provided below. Overall, the market is expected to continue to expand, with changes in public vs private exchanges, ad placement, and metrics.

Market Size

  • With the rise in global programmatic ads, and especially with the growth of programmatic ads in the US, the ad exchange market is expected to continue to increase.
  • The global Demand-Side Platform market, valued at USD $9770 million in 2018, is growing at a CAGR of 26.3%.

Ad Placement

Vendor Market Share

  • Globally, DoubleClick (owned by Google) captures 53.47% of the ad exchange market, followed by AppNexus at 13.76%, Rubicon Project at 8.06%, OpenX Market Japan at 7.36% and OpenX Ad Exchange at 6.37%.
  • For the US market specifically, DoubleClick (owned by Google) captures 51.75% of the market, followed by AppNexus at 15.80%, Rubicon Project at 7.46%, OpenX Market Japan at 6.80% and OpenX Ad Exchange at 6.16%.
  • Google's Double Click is expected to continue to be the dominant brand.

Rise of Private Ad Exchanges

  • Some companies are choosing to move towards private ad exchanges, due to brand safety concerns and ad fraud.
  • These private exchanges are geared toward premium brands and premium publishers, and offer more curated ad inventory at higher prices.
  • One example of these private exchanges is Vox Media.

A Shift Due to Regulation

  • Increased data privacy regulations, especially in Europe with the GDPR, has caused a shift towards private ad exchanges, as they are more compliant with the regulation.
  • While these regulations are mostly happening in Europe currently, they are affecting US business use of ad exchanges. For example, the New York Times has shifted all of its European ad business to private exchanges.

A Shift to Views Vs Impressions

  • In order to provide more standard metrics, ad exchanges are shifting to providing viewability metrics as opposed to impressions.
  • Views result from when the ad is actually "in-view" on a screen, as opposed to impressions which result when an ad is loaded on the screen, but may or may not be in-view. For ad publishers, viewability "enables publishers to offer higher-quality inventory at a competitive cost in the market."
Part
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Part
02

Ethical Advertisement Networks - Market Size

The size of the U.S. advertising exchange market ranges between $8.6 billion and $17.2 billion. Below is an overview of the findings.

Market Size Ad Exchange

  • "An ad exchange is a virtual marketplace where publishers and advertisers trade digital ad inventory." Thus, it is an online platform where publishers offer ad space inventory (through the Supply-Side Platform) and advertisers can bid on this ad space inventory (through the Demand-Side Platform).
  • In 2018, the internet advertising revenue was $107.5 billion.
  • Programmatic advertising uses ad exchange. This form of advertising is sold via ad exchanges. According to the Interactive Advertising Bureau (IAB), 80% of the internet advertising revenue comes from programmatic advertising.
  • From the above figures, the U.S. market size for advertising exchange was estimated to range between $8.6 billion and $17.2 billion. [see calculations below]
  • The key players in the U.S. advertising exchange market are DoubleClick (Google AdManager) which has a market share of 51.75% with 194,065 domains, AppNexus with a 15.8% market share and 59,253 domains, Rubicon Project with a 7.46% market share and 27,977 domains, OpenX Market Japan with a 6.80% market share and 25,502 domains, and OpenX Ad Exchange with a 6.16% market share and 23,116 domains. There are 18 other competitors in this space.

Market Size of Related Markets - Additional Findings of Interest

  • The global Demand-Side Platform (DSP) market was estimated to be $9,770 million in 2018 and the U.S. was estimated to have a market share of 38% in this market. This platform is for advertisers and allows them to explore advertising inventories that satisfy their requirements.
  • According to Market Watch, the global programmatic display market was estimated to be $84,600 million in 2017 and is expected to reach $244,100 million in 2023.

Research Strategy

To determine the size of the advertising exchange market, we first searched for the U.S. market size of ad exchanges. We searched for market reports on sites that sell these reports (such as IBIS World, Market and Market) and press releases. We also sought industry reports on sites such as the Interactive Advertising Bureau. These platforms usually offer the market size and the compound annual growth rate of diverse industries. No market reports were found for the market. Instead, we found market and industry reports on digital ad spending. However, it was not clear if the information provided on digital ad spend was related to ad exchange.

Therefore, we sought to understand ad exchanges better. We understood that this is a platform where publishers offer ad space and advertisers bid on ad space. From this, we deduced that information on digital ad spend most likely included the revenue in the ad exchange market but they were not the same. From articles, we understood that ad exchanges also referred to as the Supply-Side Platform (SSP). Furthermore, information on the key players in this space was found.

Equipped with this knowledge, we first sought market reports on the market size of SSP on platforms that offer marketing reports (such as Transparency Market Research, Orbis Research, Market Watch, and others) and press releases (PR Newswire, Reuters, and others). Unfortunately, this information was behind paywalls. However, information on the market size of Demand-Side Platforms (DSP) which is complementary to SSP was available. The DSP is for advertisers and allows them to explore advertising inventories that satisfy their requirements, while the SSP is for publishers and allows them to "establish their inventory and decide their prices." Furthermore, we found market reports on programmatic advertising, thus advertising that is bought through ad exchange.

As we found key players in the ad exchange space we sought to find the revenues of the major players and add them to estimate the U.S. advertising exchange market size. Google Double Click, now known as Google Ad Manager has a market share of 51.75% with 194,065 domains. We searched Google's (or Alphabet Inc) annual report but found their advertising revenue consists of the revenues from advertising on Google properties as well as revenues from their ad exchange. We sought news articles as well on the subject but were not able to discern what its income was from ad exchange solely. Also, from AppNexus, the next biggest player in this market space, with a 15.8% market share and 59,253 domains we sought its annual report but found that it is a privately held company, therefore, no annual report is available.

As the revenue for the top two ad exchange platforms (which account for 67.55% of the market share) was unavailable, we sought to better understand how ad exchange platforms earn their income. We found that ad exchange platforms request fees for their services. Therefore, we sought to understand what fees are being charged for ad exchange. We found that fees could range from 10%-20%. With this information we triangulated the requested information.

According to the IAB the internet advertising spend in 2018 was $107.5 billion in the U.S. The programmatic advertising market accounts for 80% of the market and is only sold via ad exchange. Furthermore, ad exchange platforms charge a fee of 10%-20% for making use of their platform.
Market size programmatic advertising = 0.8 x $107.5 billion =$86 billion
Lower end market size ad exchange = 0.10 x $86 billion = $8.6 billion
Higher-end market size ad exchange = 0.20 x $86 billion = $17.2 billion

Therefore, the market size for ad exchange would range between $8.6 billion and $17.2 billion.


Part
03
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Part
03

Ethical Advertisement Networks - Global Market Size

The 2019 size of the global advertising exchange market has been estimated to be about $2.4 billion.

Global Advertising Exchange Market Analysis

  • The advertising exchange software (also known as Supply-Side Platform or SSP) allows publishers to create and sell ad inventory to marketers and advertisers on their websites on an "impression-by-impression, or visitor-by-visitor basis."
  • OpenX, DoubleClick, Rubicon Project, and AppNexus are some top players in the industry.
  • DoubleClick by Google has a major market share (53.47%) of the global ad exchange market. It is followed by AppNexus which has a 13.76% share of the market.
  • The estimated global annual revenue of AppNexus is $331.2 million.
  • The estimated global size of the market is about $2.4 billion. (calculations below).

Research Strategy

To determine the size of the global advertising exchange market, your research team scoured through market reports and expert publications. While we did not find a pre-existing report on the size of the global advertising exchange market, we found the market share of top players in the global advertising exchange market. In the course of our research, we found that advertising exchange is also referred to as supply-side platform or SSP. Hence, we proceeded to search for the market size of the supply-side platform or SSP market. While there were market analysis reports on the SSP market, they were gated by a paywall. Our next approach was to triangulate the size of the market with available market share and revenue data. First, we tried to determine the revenue from the leading player in the market (DoubleClick). We found the annual filling of the parent company (Google) but it did not provide a breakdown of its financial records specific to only DoubleClick. The report provides revenue data for Google Network Members' properties which comprise AdMob, AdSense, and Google Ad Manager (also known as DoubleClick AdExchange). Therefore, we switched to the next top player (AppNexus). The parent company of AppNexus (AT&T) does not provide a breakdown of revenue by products. However, we found an estimate of AppNexus' revenue from third-party sources.

Calculation

The estimated revenue of AppNexus is $331.2 million. Its market share in the global ads exchange market is 13.76%. Therefore, the size of the market can be determined as:
market size = Revenue/market share = $331.2 million/13.76% = $2,406,976,744.19.
Part
04
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Part
04

Ethical Advertisement Networks - Growth Rate

The United States ad exchange market grew at a CAGR of approximately 35.84% from 2015 to 2018 and is predicted to grow at a CAGR of approximately 11.83% from 2019 to 2021.

The United States Ad Exchange Market Overview and Growth

  • Top players in the US market include DoubleClick (51.75%), AppNexus (15.80%), Rubicon Project (7.46%), OpenX Market Japan (6.80%), OpenX Ad Exchange (6.16%), and OpenX (3.56%).

United States Ad Exchange Market Segmentation

  • The ad exchange market is segmented into the open and private ad exchange market.

Open Ad Exchange (RTB) Market

  • The size (total spend) of the open ad exchange market in the United States from 2015 to 2021 is outlined below:

Private Ad Exchange (RTB) Market

Research Strategy

To provide the requested information, your research team began by reviewing white papers, articles, and report on ad exchange market for proper understanding of the industry and its verticals, after which we proceeded to combed market reports and reputable media such as Grand View Research, Persistence Market Research, PR Newswire, Reuters, eMarketer, and Market Watch for preexisting information on the growth rate for the United States ad exchange market. While we were able to find multiple paid market reports with this information, information regarding the industry growth was not on the public domain.

Your research team also attempted triangulating a proxy for the sector's growth rate, limited information on the public domain regarding the growth of major players like Google Ad Exchange, OpenX, Rubicon Project, and AppNexus operating in the space obviated our attempt. Hence, we could not proceed with this strategy to estimate a proxy for the industry.

We also searched through market reports and reputable media sources such as Grand View Research, Persistence Market Research, PR Newswire, Reuters, eMarketer, and Market Watch for data points like the historical, recent, and/or future market size or spend on ad exchange market in the United States. While information regarding the market size is locked behind a paywall, we were able to find some data points like the total spend on ad exchange (open and private) from 2015 to 2018 and projected spending from 2019 to 2021 in the United States, which we have leveraged to triangulate a proxy as outlined below:

Estimation of Total Spend on Ad Exchange (Market Size) in the United States

The total spend on ad exchange = spend on private ad exchange + spend on open ad exchange

The US Ad Exchange Market CAGR Estimation

2015 to 2018

Using a CAGR calculator, using the market size of the segment as of 2015 ($8.25 billion) as the beginning value, the 2018 market size for the segment ($20.68 billion) as the ending value, and three years (2015 to 2018) as the number of periods, we estimated the CAGR for the segment to be approximately 35.84%.

2019 to 2021

Using a CAGR calculator, using the market size of the segment as of 2019 ($23.78 billion) as the beginning value, the 2021 market size for the segment ($29.74 billion) as the ending value, and three years (2019 to 2021) as the number of periods, we estimated the CAGR for the segment to be approximately 11.83%.
Part
05
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Part
05

Ethical Advertisement Networks - Global Growth Rate

Research regarding the global growth rate of the advertising exchange market is not available. However, one of the segments of the market, the demand-side platform (DSP), is estimated to grow from $9.8 billion in 2018 to $31.3 billion by 2024 at a rate of 26.3% during the same period.

Helpful Findings

  • The advertising exchange market, a virtual marketplace that facilitates the buying and selling of digital ad inventory, is segmented into two categories: the supply-side platform (SSP) and the demand-side platform (DSP).
  • The (SSP) allows publishers to offer ad space inventory for sale, and the (DSP) allows advertisers to bid on ad inventory.
  • The global demand-side platform market is estimated to grow from $9.8 billion in 2018 to $31.3 billion by 2024 "at a CAGR of 26.3% between 2019 and 2024."
  • According to market data published by Datanyze, Google’s ad exchange DoubleClick dominates the market with a share of 53.47%, far ahead of the next competitor, AppNexus, with a market share of 13.76%.
  • According to Technavio research, "ad-exchange platforms will be a key driver for the global ad spending market" during the period 2018-2022.

RESEARCH STRATEGY

The research team's attempt at locating the global growth rate of the advertising exchange market started with searching for precompiled reports. This included examining market research databases and press articles, such as PR Newswire, Business Insider, IBISWorld, Statista, Markets & Markets, and more, which by convention share reports across various industry verticals. However, these databases are yet to analyze the ad exchange industry.

Next, the team searched for metrics it could use to triangulate the growth rate of the industry. We were able to learn through the MarTech Advisory site that the advertising exchange market is segmented into two categories: the supply-side platform (SSP) and the demand-side platform (DSP). The team then decided to look for precompiled reports examining each segment's growth rate separately, so that we could extrapolate the growth rate of the advertising exchange market from the average of the segments. However, we were only able to identify DSP's growth rate between 2019 and 2024, but could not determine SSP's as this statistic was behind a paywall. Data on DSP was available on Orbis Research while proprietary research databases such as Transparency Market Research, Market Research Scoop, Market Research Place, and more, held SSP's figures behind paywalls.

We also attempted to triangulate the global growth rate of the advertising exchange market using the following strategy: Finding a list of the top ten global advertising exchange platforms and examining their financials for any remarks regarding their forecasted growth rate. According to market data published by Datanyze, we identified the top ten platforms for the ad exchange market. Unfortunately, as we investigated their financials, including the annual reports, quarterly reports, CEO proxies, and more, as available, we determined that none of the companies have publicly disclosed what they expect their ad exchange businesses to be or grow in the next few years. Therefore, this strategy also proved futile.
Part
06
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Part
06

Ethical Advertisement Networks - TAM United States

After extensive research through market reports, media articles, statistical databases, and ad exchange blogs, the research team was not able to determine the total addressable market (TAM) of the advertising exchange market in the United States. However, it was determined that the digital ad spending, which is the key growth driver for the ad exchange market as it entails trading digital ad inventory, is expected to reach $129.34 billion in 2019 in the US, accounting for 54.2% of total media ad spending in the United States. Below are the helpful findings apropos that the research team found.

Market Overview

  • An ad exchange is a virtual marketplace where publishers and advertisers trade digital ad inventory. It is an online platform that is used by publishers to offer their ad space inventory for sale and advertisers, it serves as a digital marketplace for by bidding on ad inventory.
  • It is a neutral, autonomous platform, that allows for programmatic ad buying, driven by real-time bidding (RTB) technology. The three types of ad exchanges include Open Ad exchange, Preferred Deal Exchange, and Private Ad Exchange with around 70 billion impressions flowing in per day through open ad exchanges.
  • The ad exchanges started with search, but today they cover all channels, from display, social and mobile to television, radio, and outdoor.
  • As per a report by Market Watch, the global programmatic display market, which represents one section of the programmatic advertising traded through ad exchanges, was valued at $84.6 billion in 2017 and is expected to reach $244.1 billion by the end of 2023, growing at a CAGR of 19.3% during the forecast period.
  • Digital ad spending, which is the key growth driver for the ad exchange market as it entails trading digital ad inventory, is expected to reach $129.34 billion in 2019 in the US, accounting for 54.2% of total media ad spending in the United States.
  • Demand-side platforms that allow advertisers to explore inventories that meet their requirements in an ad exchange market, had a global market size of $9.77 billion in 2018 and was expected to reach $31.3 billion by the end of 2024, growing at a CAGR of 26.3% during the forecast period. The US had a 38% market share in the global market.
  • RTB, which powers ad exchanges, is the most widely used DSP (Demand-side platform) in the market, accounting for about 67.17% of the whole DSP market, because of its widely used by the majority companies.

Key Global Players

  • Some top ad exchanges operating in the industry include Google Ad Exchange (known as Double Click Ad Exchange), Open X, AppNexus, Rubicon Project, OpenX Market Japan, OpenX Ad Exchange, and Right Media among others.
  • Double Click has the highest market share of 53.47%, followed by AppNexus (13.76%), then Rubicon Project (8.06%), then OpenX Market Japan (7.36%) and, OpenX Ad Exchange (6.37%).

Research Strategy:

After extensive research, the research team was not able to determine the total addressable market (TAM) of the advertising exchange market in the United States. No data could be found in the public domain or could be triangulated. All the information found was centered around the market overview, major players operating the market, market share of some of the largest players globally, size of the digital ad spending in the US and globally which will be primarily driven by ad exchange market and the share of the most used DSPs that power ad exchanges. Below is a deep dive into the various strategies that I deployed to unearth the required information.
Our initial strategy was to scour through the research reports from Market Radar, Market Watch, Bloomberg, Reuters, Deloitte, Mckinsey, etc on the ad exchange market in the US. These reports are the most potential source for the market size/TAM related data and hence we decided to leverage this research path prima facie. While we were able to find reports that provided the market overview and also elucidated upon the global market size for the programmatic display market, which represents one section of the programmatic advertising traded through ad exchanges, there was no information that could be located specifically for the advertising exchange TAM in US. We also found reports on the US digital Ad spending which is one of the key drivers for the ad exchanges Market, but again these provided no insights into the US TAM for the Ad Exchange market.
Our second strategy was to research through the media articles from Forbes, WSJ, Business Insider, Vox, Live Mint, etc; statistical databases such as Statista; and advertising exchange information blogs such as 'AdExchanger', 'Datanyze', 'SmartyAds' etc. All these are again potential sources that contain key numbers around market growth, market size/TAM and trends for any particular industry, especially quoted from paid sources and hence we decided to focus on these sources. However, again no relevant information could be located and all the information found was centered around the key players operating in the ad exchange market globally along with the market share of the top players. Other articles found enumerated upon the trend in an increase in digital ad spending in the US and globally which acts as a key growth driver for the ad exchange market with no data on the TAM of the US Ad exchange market being available through these sources. Hence, this strategy was not fruitful.
Our third strategy was focused on the websites, filings, blogs and other supplemental reports of the top players operating in the industry globally as well as in the US. We envisioned that at times, key industry players especially the leading companies do furnish information on the growth and size of the industry in which they operate in their filings in order to provide an estimate of the market opportunity and the relative scale of operations of the company. Therefore, we were optimistic that this strategy would yield relevant results. However, after extensive research through these sources, our efforts were not fruitful. While we were able to locate the major players operating in the market and their market share based on the number of domains, all the players were found to be private with no detailed filings or annual reports were available. All the information found from the players' websites/blogs focused around the key products and competencies of the individual players with NO data on the TAM of the US ad exchange market.
Our fourth strategy was to try to triangulate the information. Since ad exchanges involve trading by advertisers mainly in the digital ad inventory of various publishers, the TAM for the same could have been defined as the total digital Ad spending that is likely to take place in the United States and the percentage of that spending that is likely to be routed through the ad exchanges. So for example, if the US digital Ad spending was likely to be $X billion with Y% of that being through the ad exchanges, the TAM of the US ad exchange market could have been computed as $(X*Y/100) billion. While we were able to find information on the digital Ad spending in the US through various articles and reports, no information on what percentage of the same is currently routed through Ad exchanges could be found. Therefore, our attempts to triangulate the information was futile because we were not able to find data that could be used for computational purposes.
Our fifth strategy was to find alternate data points in order to try to estimate the US TAM for the ad exchange market. For this strategy, we tried to look at the various types of ad exchanges and try to determine the TAM for those exchanges. The idea here was two-fold. One was to try to find TAM for the individual types of ad exchanges and then aggregate them to arrive at the overall TAM or second to try to find if any specific type of exchange represented X% of the overall US TAM and then use it to triangulate the overall US TAM. While we were able to establish that there are three types of ad exchanges that include Open Ad exchange, Preferred Deal Exchange and Private Ad Exchange, there were no specific details that we could locate for the TAM of these individual types of exchanges. All the information found focused around the differences between these types of exchanges and also the data on the impressions flowing in each day through them like, for example, 70 billion impressions flow in per day through open ad exchanges. Therefore, this strategy did not yield fruitful results.

Limitation of the Research

The primary reason for the information to be missing could be due to the fact that the information is niche-centered and, therefore, no research report or media articles have reported any relevant data apropos of the same.
Part
07
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Part
07

Ethical Advertisement Networks - TAM Global

The global advertising exchange market has a market size of approximately $1.53 billion.

Market Size Ad Exchange

  • The global market size/TAM of the advertising exchange market is approximately $1.53 billion.
  • According to market data published by Datanyze, 98.66% of the global advertising exchange market is dominated by ten companies — Google's ad exchange business, DoubleClick, controls more than half of the market (53.47%), far ahead of the next competitors, AppNexus (13.76%), Rubicon Project (8.06%), etc.
  • The top ten ad exchange platforms include DoubleClick, AppNexus, Rubicon Project, OpenX Market Japan, OpenX Ad Exchange, OpenX, Right Media, BidSwitch, PulsePoint, and District M.
  • Rubicon's overall revenue comes from advertising exchange — which is defined as "a virtual marketplace where publishers and advertisers trade digital ad inventory."
  • According to Rubicon Project annual report, "the company generates revenue from transactions where it provides a platform for the purchase and sale of digital advertising inventory between buyers and sellers of advertising inventory."

RESEARCH STRATEGY

The research team's attempt at locating the size (TAM) of the advertising exchange market started with searching for precompiled reports. This included examining market research databases and press articles, such as PR Newswire, Business Insider, IBISWorld, Statista, Markets & Markets, and more, which by convention share reports across various industry verticals. However, these databases are yet to analyze the ad exchange industry.

Next, the team searched for metrics it could use to triangulate the TAM/market size of the industry. We were able to learn through Datanyze that about 98.66% of the advertising exchange market is dominated by ten companies. Therefore, we attempted to triangulate the market size using the following strategy: to determine each company's annual revenue specific to advertising exchange and summing them to act as a proxy of the overall market size. However, this strategy proved futile as some of the companies; for example, AppNexus, are privately-held and are not required to make public their financials. Others like Google's Double Click, their advertising revenue consists of the revenues from advertising on Google properties as well as revenues from their ad exchange. The only company whose revenue is solely from advertising exchange transactions is the Rubicon Project.

As the revenue for the top nine ad exchange platforms was unavailable, we sought to use Rubicon's revenue and the market share of the rest to extrapolate each platform's revenue specific to advertising exchange.

Advertising Exchange Revenue

Rubicon Project generated ad exchange revenue of about $124.69 million in 2018. According to Datanyze, the platform holds 8.06% of the advertising exchange market. Therefore,
DoubleClick 's revenue is approximately $827.19 million; calculated as follows: (53.47%*$124.69 million)/8.06%.
AppNexus' revenue is approximately $212.87 million; calculated as follows: (13.76%*$124.69 million)/8.06%.
OpenX Market Japan's revenue is approximately $113.86 million; calculated as follows: (7.36%*$124.69 million)/8.06%.
OpenX Ad Exchange's revenue is approximately $98.55 million; calculated as follows: (6.37%*$124.69 million)/8.06%.
OpenX's revenue is approximately $47.49 million; calculated as follows: (3.07%*$124.69 million)/8.06%.
Right Media's revenue is approximately $37.59 million; calculated as follows: (2.43%*$124.69 million)/8.06%.
BidSwitch's revenue is approximately $37.44 million; calculated as follows: (2.42%*$124.69 million)/8.06%.
PulsePoint's revenue is approximately $16.24 million; calculated as follows: (1.05%*$124.69 million)/8.06%.
District M revenue is approximately $10.37 million; calculated as follows: (0.67%*$124.69 million)/8.06%.

Advertising Exchange Market Size (TAM)

By adding up the revenues of the top ten ad exchange platforms (which account for 98.66% of the market share), we triangulated the industry's TAM at roughly $1.53 billion — calculated as follows: (827.19+212.87+124.69+113.86+98.55+47.49+37.59+37.44+16.24+10.37).
Part
08
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Part
08

Ethical Advertisement Networks - Trends United States

There are two significant trends in ethical advertising. The Trustworthy Accountability Group is leading the trend toward principled processes in the advertising profession. The Coalition for Better Ads is shepherding the trend to ensure ads are designed to meet the consumer desire for an uninterrupted internet experience.

Trend #1 — Principles of Ethical Advertising — TAG

Efficiency

  • Efficiency includes the pledge that an agency's digital deliverables will perform as promised including guaranteeing no malware, reviewing for brand safety and refresh rates and continuous monitoring for invalid traffic
  • It also covers compliance with the Better Ads Standards that have been developed by the Coalition for Better Ads, which includes following the technical guidelines to eliminate infrastructure waste.

Transparency

  • Transparency is the establishment of clear and published practices that develop trust among the participants. There are three parts defined under transparency.
  • Fees will be assessed and made explicit to the entity being charged.
  • The supply chain is fully auditable, including RFPs, winning bids, and other parts of the process.
  • Any changes to items that may alter success for the buyers are discussed with all parties within a reasonable timeline before going live.

Fair Market

  • The purpose of a fair-market principle is to outline clear rules that ensure the objectives of all marketplace participants are equally considered.
  • These include clear auction rules, no kickbacks or rebates, and no biased auction processes that could undermine the integrity of the decision.

Reason for the Trend

  • The purpose of this group is two-fold: to fight criminal activity across the digital advertising supply chain and to provide guidelines and processes that will foster trust in the industry
  • In 2019, TAG signed the 500th member to its association. Its website provides the ability to enter the name of an advertising agency and determine if they have been verified by the TAG program.
  • TAG provides membership for Advertisers, Agencies, Ad Tech, and Publishers. They can earn certification against fraud, piracy, and malware.

Companies Participating

  • Among the well-known participants on the Leadership Group for TAG are Amazon Advertising, Charter Communications, Dentsu Aegis Network, Disney, Dr. Pepper Snapple Group, EMX Digital, Facebook, Google, GroupM, Index Exchange, NBCUniversal, Omnicom, OpenX, Publicis Groupe, The Trade Desk and Warner Bros.

Trend #2 — Consumer Concerns — Coalition for Better Ads

  • While TAG concerns itself with professional, ethical processes and fighting criminal activity, the Coalition for Better Ads is focused on the consumer side of advertising.
  • This organization sees the value of advertising in supporting the availability of free content, meaningful journalism, and societal support across the internet. Their goal, therefore, is to ensure that consumers are not frustrated by ads that negatively affect their experience by interrupting content and slowing browsers.
  • The Coalition for Better Ads is composed of international trade associations that will leverage both consumer feedback and insights and industry expertise to develop global standards for online advertising.
  • The Coalition has sponsored extensive research with over 60,000 consumers in countries that represent 70% of global online ad spending. The study found strong agreement among consumers across the globe, which resulted in the Better Ad Standards for desktop and mobile experiences.

Reason for the Trend

  • Advertisers are rightly concerned that consumers are appropriately exposed to the ads they purchase. The Better Ad Standards are designed to identify how to ensure ad experiences remain above the threshold that could cause consumers to install ad blockers.

Companies Participating


Part
09
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Part
09

Ethical Advertisement Networks - Global Trends

Transparent Delivery Infrastructure and Conscious Choices to Top Advertising Abuse are the two trends in the ethical advertising exchange market.

Transparent Delivery Infrastructure

Description

Why it is a trend

Companies Manifesting the Trend

  • Companies manifesting the trend includes MediaMath, Rubicon Project, Havas, White Ops, Telaria, Acoustic, Akamai, Business Insider, Crackle Plus, IBM Watson Advertising, IRIS.TV, News Corp., Octopus Interactive, Publishers Clearing House, Oracle Data Cloud, and Inscape.

Conscious Choices To Stop Advertising Abuse

Description

  • A trend where ethical advertising networks should stop advertising abuse by highlighting the conscious choices advertisers and agencies can make to ensure good practice.
  • This trend is set up to ensure that industry ethics keeps pace with the technology of modern advertising that eradicate ad fraud, prevent brands from funding hate speech or deliberately misleading ‘fake news’ and to ensure that people are viewed as active, consensual participants in their own online experience.

Why it is a trend

Companies Manifesting the Trend

  • Manifested by different organization ranging from campaigning groups such as The Conscious Advertising Network (CAN), Show Racism The Red Card; Stop Funding Hate; TellMAMA — to agencies such as Accenture Interactive; The 7 Stars; Merkle Periscopix; and Media Bounty. And brands such as The Body Shop, eCover and British Boxers. Other partners include JICWEBS and the National Union of Students.

Research Strategy

We leveraged a compilation of industry reports, leading publications and expert blogs to curate at least 2 trends specific to ethical advertisement network market. We began our research by examining trusted resources such as Mobile Marketing Magazine, ISBA, and MediaMath blogs. We were able to identify trends in the ethical advertisement networks to include Transparent Delivery Infrastructure and Conscious Choices To Stop Advertising Abuse. We then identified these as current trends because they are adapted by many Ethical Advertisement Networks in the market such as MediaMath, Rubicon Project, and EthicAd.
Part
10
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Part
10

Ethical Advertisement Networks - SWOT United States

The automated allocation process is the biggest advantage of the ad exchange market. The market has recently experienced weakness in brand control that led to ad fraud losses and criticism for consumer privacy practices in the past couple of years, both of which are areas that present opportunities for the market. Information regarding the strengths, weaknesses, opportunities, and threats is provided below.

Strengths

  • The automation of the buying process of advertising exchanges is their unique selling point. Ad exchanges allow display ads and ad space to be "allocated much more efficiently and easily across the web".
  • The variety of ad formats that are available for ad exchanges to utilize is growing and improving, and
  • Mobile advertising is dependent on the automation of buying digital ad sales from ad exchanges,

Weaknesses

  • Companies that want greater control over their user data and ad placement are moving their ad operations in-house, and this trend is expected to continue in upcoming years.
  • The automated nature of ad exchanges exposes problems with brand safety and transparency that have been discussed in the press. Weak brand control has led to global ad fraud losses in 2017 and 2018 of $6.5 billion and $5.8 billion, respectively.

Opportunities

  • Ad exchanges can improve their revenues by designing different mechanisms other than the commonly used sealed bid auctions and trying randomized sales mechanism that allow the buyer to choose if they want a buy-it-now purchase or an auction with random allocation among the top bidders.
  • Ad exchanges can reshape their relationships with advertisers and publishers to provide them more control in where their ads are placed and use of their user data. This can retain some of the 73% of companies that cite hiring talent as the biggest reason they have not moved their ad operations in-house.
  • AdExchanger states that only 39% of clients know that that digital out-of-home opportunities exist, and this category is expected to grow by 12% in ad spend by 2020 which is faster than traditional media and an area of opportunity for ad exchanges.
  • Following core principles such as those put forth in an open letter from the CEOs of several ad exchanges can build a trustworthy reputation. The open letter gave core principles to be efficiency, transparency and fair-market values and put that following these principles "will generate value for all sides of the market".
  • Mobile programmatic advertising is said to be transforming mobile advertising, and $36 billion was the estimated 2019 mobile programmatic ad spend and represents an area of growing opportunity for ad exchanges.

Threats

Part
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Part
11

Ethical Advertisement Networks - SWOT Global

A Global Perspective of the Advertising Exchange Market

The ad exchange industry has revolutionized advertising worldwide. Creativity and innovation are vividly displayed when one considers how this system works. Transactions happen at terrific speed with auction and bid processes completing in micro seconds. Statistics show that despite the fraud challenge that has infiltrated ad exchange, revenues are growing at an estimate rate of 20 percent.

Strengths

  • Ad exchanges provide a common platform on which different players in the ad industry can operate. Publishers, advertisers and ad networks are all able to run their transactions through ad exchanges.
  • Ad exchanges help publishers to market their ads and ad space efficiently. They put a professional touch on ad content, design, and placement on the web page.
  • Ad exchanges also assist advertisers to get value for their money. They enable them to target viable audiences, set the right timings for ad appearances, and block unworthy markets.
  • The digital advertising industry is growing with speed across the globe. Statistics reveal that in the US alone, advertisers will be spending about $70 billion in 2020.
  • Ad exchanges use what is referred to as 'real time bidding' where transactions happen in a split-second. Publishers do not have to wait to get returns to their investments.

Weaknesses

  • Advertisers often raise concern over the lack of honesty on the side of ad exchange firms. The latter are accused of manipulating auctions to take advantage of advertisers
  • Investors in this sector experience enormous losses as a result of fraud. Three years ago fraud costed the industry $6.5 billion worldwide.
  • There are cries that ad publishers are not giving quality a priority. Ads are released to the public before undergoing quality checks.
  • Respectable users have worries about their brands being misused or misplaced in the ad exchanges. An example of this is when an ad for a globally respected organization is placed near an ad of a 'illegal' entity.

Opportunities

Threats

  • Google plans to roll out a system that will significantly change how ad bidding happens. Currently, the highest bidder is not under any obligation to pay the price they first quoted. The highest bidders simply pay any amount that is higher than that quoted by the second bidder. This new approach by Google will require that bidders pay as per their first quotation.
  • Ad fraud is on the increase and is negatively affecting ad publishers and users. Using artificial intelligence, fraudsters can either prevent authentic ads from displaying in the advert spaces or make it difficult for bidders to access ads. Sometimes they direct payments to wrong destinations. Fraud is indeed eroding confidence in the ad exchange sector.
  • European Union's General Data Protection Regulations (GDPR) is having a negative impact on the freedom with which ad exchanges can operate in the European nations. Since the launch of GDPR, ad exchanges have to be very careful with the management of data for the European market to avoid getting into legal issues.


Part
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Part
12

Ethical Advertisement Networks - Ad Exchange

Mediamath, Rocket Fuel, Vivial, AppNexus, and Trade Desk are some of the top ad exchanges based on revenue.

Top 5 ad exchanges based on revenue:

Other ad exchanges/networks targeting specific segments:

Gay Ad Network:

  • Gay Ad Network is a data-driven audience targeting service that makes it possible for advertisers to reach gay and lesbian consumers beyond gay media.
  • It is the largest advertising marketplace for connecting advertisers with LGBT consumers worldwide.
  • Their annual estimated revenue is $386,000.

Pink Banana Media:

  • Pink Banana Media is an ad network that helps its clients reach their specific LGBTQ demographic by integrating technology with online advertising on websites, mobile apps, and social media newsfeeds.
  • Their website has exposure to over 10,000,000 unique LGBT consumers.
  • The network has access to over 50 ad exchanges, including Google, Rubicon, AdTech Exchange, LiveIntent, PubMatic, OpenX, and PulsePoint.
  • Their annual estimated revenue is $2.40 million.

Research Strategy:

We started by first checking for the ad exchanges/networks that are targeting any specific segments in industry publications including articles, blogs, journals, and websites that specialize in publishing advertising in order to find the top players the segment they are targeting. However, after going through sources like Digiday, Smartyads, Adpushup, Monetizemore, AdWeek, Advertising Age, HOW Magazine, The Drum, and The Next Web, we could not find any relevant information.

We then looked for case studies on top players in various segments and how they have successfully advertised themselves. We looked through segments like blockchain, LGBTQ, and child support but the case studies did not include anything on ad exchange/networks and their role in it. We did, however, find two networks that target the LGBTQ community through their vast approach to ad exchanges. While we could find information on their revenue through third-party databases like Owler and ZoomInfo, we were unable to find any data to prove that these were among the top 5 in any comparable metric.
We also tried to find the top players in the ad exchange/networking and then look for their targets within their websites. We focused our research on sources like Headerbidding, Blogknife, Affnext, Mowplayer but the list of players there did not contain an explanation of why they were chosen as the top. However, as AppNexus was mentioned numerous times, we moved on to find its revenue and its major competitors. Using that strategy we were to identify four more players that had similar revenue to AppNexus and operated within the same industry. We then went through their websites to find if there were any mention or relevant information on the segments they were targeting. However, we could not find any specific information about the segments they target as most of the information was focused on the companies' products and how they help companies.
Part
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Part
13

Ethical Advertisement Networks - Competitive Analysis

DoubleClick allows online publishers and advertisers to manage the frequency and the length of time of ad appearance to any browser while AppNexus is a software company offering internet advertising to clients. Rubicon Project is a platform focusing on innovation for ad exchange products while both OpenX Market Japan and OpenX Ad Exchange are programmatic marketplaces that connect premium ad publishers and app developers with leading advertisers.

#1. DoubleClick (Google AdManager)

  • DoubleClick is a company owned by Google since 2007. It is used by online publishers and advertisers to display advertising on websites.
  • It allows online publishers and advertisers to manage the frequency and the length of time of ad appearance to any browser.
  • Google bought DoubleClick for $3.1 billion and the company uses this ad exchange technology. In 2018, it was reported that Google generates 96% of its revenue from advertisement products.
  • Google unified DoubleClick and Google Analytics 360 Suite under a single brand called Google Marketing Platform last July 2018. This merge created new product names and logos.

Offerings

  • The business offers advertising technology created for media and advertising agencies.
  • DoubleClick originally offered the DART family which includes DFP, DFA, DS, Motif, DE, Sales Manager, Media Visor, Adapt, and DoubleClick Advertising Exchange.
  • However, when it was unified to Google Analytics 360 Suite, the product line was changed to Display & Video 360, Search Ads 360, Analytics 360, Data Studio, Optimize 360, Survey 360 and Tag Manager 360.

Target Market

#2. APPNEXUS

  • AppNexus is a software company providing internet advertising to clients. This marketplace has over 34,000 advertisers and 177 brands taking advantage of the efficient, leading and transparent platform destination.
  • The AppNexus Marketplace provides two marketplaces for advertisers and brands who want to buy or sell.
  • AppNexus is part of A Xandr Company operating in 28 W. 23rd Street New York, New York, 10010.

Offerings

  • The AppNexus Marketplace provides the AppNexus Programmable Platform for buyers.
  • It also has the AppNexus AdServer, AppNexus SSP, Audience Extension and Yieldex Analytics for sellers.

Target Market

#3. Rubicon Project

  • Rubicon Project is a US-based digital ad company founded in 2007. The company operates an automated ad platform for publishers and advertisers to help them access the globe's top brands and customers.
  • Rubicon Project is a platform focusing on innovation for ad exchange products.
  • The company offers products and services for buyers, sellers, and developers.

Offerings

  • Rubicon Project offers a programmatic marketplace for header bidding, mobile, video and deals management.
  • The company also offers technology for developers such as product documentation, developer resources, and platform information.

Target Market

  • The primary target market of the company are buyers, sellers, and developers of digital advertising technology.

#4. OpenX Market- Japan

  • OpenX is a company providing a programmatic advertising marketplace for publishers. In 2016, the OpenX opened its OpenX marketplace in Japan.
  • According to the co-founder and Chief revenue f OpenX, there is a potential in the Japan market and other neighboring APAC countries when it comes to monetization for ad publishers.
  • According to PwC, there is a strong demand for a programmatic advertising marketplace in this region that might help Japan's media market reach $170 billion worth in 2020.
  • Satoru Yamauchi was appointed as the Director of Partner Services in OpenX Market Japan.
  • In July 2018, OpenX Market Japan had grown its revenue to 87%. It was also reported that the OpenX Market Japan had at least 40 new publisher partners.

Offerings

  • The company offers access to video inventory, programmatic strategies like video formats, mobile web and mobile apps such as in-stream, out-stream, interstitial, opt-in video, etc.
  • OpenX Market Japan also offers integration through header bidding via OpenX Bidder.

Target Market

  • The target market of OpenX Market Japan is advertising publishers and marketers. (Source 14)

#5. OpenX Ad Exchange

  • OpenX Ad Exchange is a programmatic marketplace for premium publishers and app developers that enables them to connect with the leading advertisers.
  • The company is completely integrated with white ops, IAS and MOAT. It also supports piracy prevention through TAG’s Program Inventory Quality Guidelines.
  • The marketplace currently has over 1,200 premium publishers, over 50,000 mobile apps and over 34,000 advertisers and more than 400 DSPs, spanning 190 countries.

Offerings

  • The OpenX Ad Exchange offers its publishers and app developers the ability to connect to leading advertisers through their quality marketplace.
  • The company also offers unique inventory access, the largest independent ad exchange, and technology partnership.

Target Market

  • The main target market of OpenX Ad Exchange is premium publishers and app developers that enables them to connect with the leading advertisers.
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Part
14

Ethical Advertisement Networks - Case Studies United States

OpenX and Rubicon Project are two case studies of top ad exchange companies that are successful in the U.S.

OpenX

  • In the 2018 fiscal year, OpenX invested $50 million into research and development initiatives which were focused on mobile and video.
  • The company invested over $16 million to ensure the quality of its products by recruiting the "largest dedicated quality team of any independent exchange to develop and implement proprietary anti-fraud efforts, supporting third-party verification of the company’s quality initiatives such as independent auditing of OpenX’s TAG approved status, and refusing to monetize questionable inventory to protect brand investment at massive scale."
  • Following the investments, the company transitioned from a mobile-first company to include video as well, with mobile inventory surpassing desktop.
  • Its mobile business grew by 39%, which brought about an 89% rise in in-app revenue.
  • Revenue generated from video ad exchange rose by 5,000%. This growth is spurred by its largest customers depending on OpenX's "high-quality exchange to help navigate the ongoing shift to video in digital media."
  • Top publishers turned to OpenX Exchange in order to monetize their video inventory.
  • Overall, OpenX saw a 20% rise in revenue in 2018, making it the 10th straight year of growth and a 4th straight year of profitability for the company.

Rubicon Project

  • In 2017, Rubicon Project excluded buyer fees from its platform amidst a battle over take rates in the ad exchange market which led buyers to cut down the number of exchanges they work with.
  • Rubicon dropped its take rate to 12.8%, thereby, depending on its cash reserve to fund its business.
  • The company assured its investors that it would "grow its inventory, attract more ad spend, and get to a positive adjusted EBITDA by Q4 2018" before running out of cash.
  • Two years on, Rubicon registered a 30% rise in revenue in the first quarter of 2019. Its mobile segment revenue rose by 63%, desktop grew by 6%, and revenue from video was doubled.
  • Michael G. Barrett — president and CEO of Rubicon — hinted that the 2019 "success is a direct result of the many actions taken over the past two years." He also added that the company expects to continue to benefit from those decisions as they continue to invest on the seller side of the business.
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Part
15

Ethical Advertisement Networks - Case Studies Global

Two successful ethical key players in the ad exchange market are Sovrn and SpotX. Sovrn is the world’s third-largest advertising technology company and SpotX is the largest global marketplace of video ad inventory.

Sovrn AWS

  • Sovrn is an advertising technology company that provides its clients with advertising tools, technologies, and services to generate income, grow their business and access a massive data commons providing unique insights.
  • Sovrn decided to change their existing testing environment to support their plans for transferring their massive workloads into AWS. Before seeking the help of Cloudreach, the advertising company was running their data platform on a mixed environment which was made up of on-premise data centers and Softlayer cloud services. This cost the company almost 7 million dollars a year in upkeep and did not allow for elasticity, flexibility or resiliency.
  • Cloudreach provided Sovrn with an assessment of their existing AWS environment, insights and resources required for a successful AWS & data and analytics implementation, built the AWS platform, and taught Sovrn employees how to support the new AWS environment.
  • The Cloudreach team used an "Automation First strategy and Terraform to automate the client’s infrastructure in AWS". This allowed Sovrn to spin up environments rapidly in various domains and spin down to lower costs. Cloudreach also implemented a data lake strategy for the data platform, a data pipeline, a 67 node EMR cluster, an AWS Glue Catalog, applied AWS Lambda, enacted Apache Airflow and assisted in migrating more than 250 HIve jobs to Sovrn’s new AWS environment.
  • The successful implementation of Cloudreach’s AWS and data and analytics strategies allowed Sovrn to have a fully scalable up to date data platform that can handle over 20 billion transactions daily. The company also has the ability to continuously innovate without any restrictions. The move to the new AWS system saves Sovrn an estimated $5 million per year in infrastructure costs.
  • Sovrn's website mentions that they are proud leaders of "anti-fraud, pro-transparency initiatives that promote fair market principles". They are also the recipient of The Drum Digital Trading Awards for Best Overall Technology for Programmatic Trading and the British Media Awards for Technology Provider of the Year.

SpotX Device Detection for All Environments

  • SpotX is a video advertising platform that connects its clients with "advertisers, agencies, trading desks, DSPs and ad networks" so they can achieve maximum revenue for their inventory. SpotX have over 5 billion ad decisions per day, over 600 million unique visitors in more than 190 countries each month.
  • SpotX engaged with DeviceAtlas, the "world’s leading device detection and intelligence solution" in order to increase targeting options and ad traffic transparency. This was done by verifying the type of requesting device and serving the appropriate ads. This in turn allowed the platform to provide its ad buyers and publishers with insight into campaign statistics based on device type.
  • The device detection implemented allowed SpotX to increase its video ad reach by providing clients with deep device understanding. Using device awareness as part of targeting and campaign analysis options allowed SpotX partners to create more engaging and better performing video ad campaigns.
  • SpotX has also been able to gather detailed insights into devices that negatively affect their platform, provide key operating and engineering insights that have enabled SpotX to build better and more robust mobile products for advertisers and publishers.
  • SpotX volunteers with Amp The Cause. The company participates in various facility improvement projects, including landscaping, indoor and outdoor painting, general cleaning and other maintenance. They also volunteer at the Children's Hospital, homeless shelters, wildlife animal sanctuary and educational non-profits. SpotX received many awards including the Adweek Readers' Choice Award, ExchangeWire Ad Tech Personality of the Year Award, The Digiday Worklife Awards and the Stevie American Business Awards.

Research Strategy

We commenced the research by searching advertising campaigns & case studies database such as Effie, WARC Case Finder and Creative Brief for case studies relating to ethical ad exchange players. This strategy yielded no accurate results; we found case studies on Kenco, a logistic company repositioning plan to give young Hondurans a way out of gang life, 2017 Lyft and Kargo Round Up & Donate mobile campaign, Neste and Ponsse: Finlandia by Forest Machines, and Dainik Jagran Sanskarshala: A newspaper initiates the quest for meaning.

We then conducted a public search for top organizations and key players in the ad exchange network so that we can determine what they are doing ethically. Our search led to an open letter to advertisers and publishers whereby six leaders in the ad exchange industry pledged to uphold a set of marketplace principles that promote clarity and trust. We then searched the websites of the organizations to find news or press releases relating to ethics, accountability and transparency practices.



Part
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Part
16

Ethical Advertisement Networks

Advertising exchange operations can be done privately or openly on several platforms. The articles below show how to run an ad exchange through different methods and programs.

How to Run an Advertising Exchange Operation

  • Element Three gives details on how to run an ad exchange with the use of programmatic advertising, or automatic selling. The article from the marketing agency gives advice on choosing a starter-program and lists five tips on how to successfully navigate through the process. It also gives an inside look at the advertising software that Element Three's own team of expert marketers and developers use.
  • A 2019 article on Header Bidding shows how to get an account with Google AdX for conducting ad exchange. The information is written by the Automated Team, which is a group with expertise is programmatic monetization software. They explain the sign-up process and eligibility requirements for partnering with Google.
  • Additionally, Google Support provides a checklist for running ad exchanges through their Ad Manager. The four-part guide shows the features of an Ad Exchange account and how to organize ad inventory through branding and other controls.
Sources
Sources

From Part 04
Quotes
  • "Ad exchange is a term that defines platforms which enable the buying and selling of ad inventory (typically from advertising networks). The process of facilitating buying and selling is conducted through bidding and automatic ad placement for the highest bidders."
  • "Ad exchanges typically operate on the basis of real-time bidding (RTB), and ad inventory is bought and sold programmatically and instantly. "