Some of my friends over at DeSilva+Phillips a boutique investment bank (also known as MediaBankers) have just released a white paper (links to the PDF) entitled Getting Real. I am always skeptical about investment bank led white papers (unless they are presentations by Mary Meeker which I love) but these guys pulled off a pretty solid document.
The goal of the paper was to talk about the marketplace of ad exchanges, RTB (real time bidding), and the future of online advertising. I would say that the paper does a good job of setting up the history and current ecosystem that surrounds ad exchanges but lacks anything tangible about the future of online advertising other than saying that many media channels will become digital so a digital infrastructure today is required to service them, which I’m a big proponent of.
There is about $430MM invested in this ecosystem over the past 3 years which has attracted lots of attention from the press, marketing services companies, and of course, investors. Figuring a venture capital fund wants to see some sort of liquidity within a funds lifespan (~10 years), the next 5-7 years are going to potentially be very “acquisitive.” Thus probably the impetus for DeSilva+Phillips to release this document to establish themselves as leaders in this space.
Some of the main highlights of the paper:
- A nice breakdown of what “ad exchanges” actually are including the great Online Advertising Ecosystem graphic from Matthew S. Goldstein that has been circling around some inner circles.
- Discussions around Right Media’s decision to focus only on premium inventory
- A solid definition around DSPs without over-hyping them
- Accenture, which is not normally considered a player in this space is potentially moving in and could open up a new business within the space (has AdChemy partnership, owns a search bid management platform)
- “Real-Time Bidding is the glue for melding display-ad marketing and search marketing”
- Talk about SSP (supply-side platforms)
- Yahoo vs. Google and the ultimate threat of Google (it is scary)
- Neutrality around ad exchanges and how it’s not a long or even mid-term option (though I’d argue that is what this industry needs)
- Adding two more acronyms to the vocabulary: DBO (Dynamic Media Buying Optimization) and ARM (Audience Relationship Management)
You can download the paper here.