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Online Advertisers Survey Report 2013

In association with Rubicon Project

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Online Advertisers Survey Report 2013

Econsultancy London

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Copyright © Econsultancy.com Ltd 2013

Supported by:

Published September 2013

Online Advertisers Survey Report 2013 In association with Rubicon Project

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

Contents

1. Executive Summary and Highlights ................................ 4

2. Foreword by Rubicon Project .......................................... 6

3. About Econsultancy ......................................................... 7

4. About Rubicon Project ..................................................... 8

5. Methodology and Sample ................................................ 9

6. Findings ......................................................................... 10

6.1. Online advertising: buying and spending................................. 10

6.1.1. Spending trends ..................................................................... 10

6.1.2. Display advertising prices ...................................................... 13

6.1.3. Budget shifts .......................................................................... 15

6.1.4. How display advertising is bought ........................................ 16

6.1.5. Use of data ............................................................................. 17

6.2. Real-time bidding and targeting ................................................18

6.2.1. Advantages of real-time bidding ........................................... 18

6.3. Trading desks and demand-side platforms ............................... 19

6.3.1. Spending with trading desks ................................................. 19

6.3.2. Trading desk spend on real-time bidding ............................. 20

6.3.3. Number of demand-side platforms ....................................... 21

6.3.4. Benefits of working with demand-side platforms ................. 22

6.3.5. Challenges faced when working with demand-side platforms ................................................................................ 23

6.4. Private marketplace deals ......................................................... 24

7. Appendix: Respondent Profiles ..................................... 27

7.1. Annual company turnover ........................................................ 27

7.2. Geography.................................................................................. 28

7.3. Business sector .......................................................................... 29

Online Advertisers Survey Report 2013

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

1. Executive Summary and Highlights This is Econsultancy’s third Online Advertisers Survey Report, carried out in association with

Rubicon Project and based on a survey of more than 650 advertisers and agencies. The findings

are presented globally, with key charts broken down for the UK, US, France, Germany and Asia

Pacific.

The research explores online advertising trends, including budgets, use of different channels,

real-time-bidding (RTB), demand-side platforms (DSPs) and private marketplaces. The following

trends have been identified as the main findings from the report.

Strong investment from advertisers in online display advertising

Spending across online advertising channels has increased in the last year, which builds on the

growth highlighted by our last online advertising survey carried out in 2011. In the case of display

advertising, the proportion of advertisers citing an increase in spend has risen from 57% in 2009

to 64% in 2013.

The growing investment in display has led to an increase in pricing…

…

Spend on Facebook advertising still high, but signs of an approaching plateau

As was the case in 2011, Facebook advertising is the online advertising channel where the largest

proportion of companies (68%) have increased spending in the last year. This reflects the

continued growth of Facebook as an advertising platform…

Online Advertisers Survey Report 2013

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

2. Foreword by Rubicon Project Welcome to our third Online Advertising Survey, which we have conducted bi-annually with

Econsultancy since 2009. Over the past four years, this report has provided a snapshot of the

digital ad market, and the latest trends affecting both buyers and sellers at the frontlines of media

trading.

Since we started working with Econsultancy on the report, real-time bidding and private

marketplaces have grown from a small but disruptive force for change in a world dominated by

fax and Excel, to the world we have today: where all of the major publishers and agencies globally

are increasingly moving higher and higher value deals towards this channel.

As this year’s report will attest, the charge towards automation has been led by Europe –

sometimes in markets such as the Netherlands – where the average IO value makes the removal

of overhead costs in the incumbent trading process even more urgent.

National publisher collectives are also speeding the adoption of RTB and private marketplaces at

an incredible rate. This is particularly clear from this year’s report data on the French market,

where the La Place Media co-operative launched in September 2012.

Elsewhere, we see the continued adoption of private marketplaces across the globe, but

particularly in the UK, US and across APAC, as the buy side recognises the value of the superior

inventory and placements on offer and publishers benefit from higher yields.

Of course, we could not mention the private marketplace phenomenon without also covering data.

Safely passed by publishers via Deal ID within private marketplace deals, first party data has

given buyers a new level of precision, whether it be around customer intent, audience group or

even the individual product being advertised.

The growing importance of first party data has perhaps been the single most significant trend in

online advertising over the past year, so it is fitting that for the first time we devote an entire

section to this development and the major factors around it, such as the growing importance of

the data management platform (DMP) within the ad technology stack.

These are just a few of the overriding trends we see in this year’s report – read on for a fuller view

of the factors shaping a market which we know to be one of the most exciting, fastest growing and

the most constantly developing we have ever seen.

Jay Stevens, GM and SVP International, Rubicon Project

Online Advertisers Survey Report 2013

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3. About Econsultancy Econsultancy is a global publisher, which educates the world’s marketers on everything from web

analytics and email marketing, to social media, PR and ecommerce. It is used by more than

400,000 internet professionals every month.

We provide independent research, consultancy services, and worldwide events and training for

over 200,000 members and counting, with a retention rate of more than 90%.

For the last 10 years, our resources have helped subscribers learn, make better decisions, build

business cases, find the best suppliers, accelerate their careers and lead the way in best practice

and innovation.

Econsultancy has offices in London, New York and Singapore and we are a leading provider of

digital marketing training and consultancy. We are providing consultancy and custom training

extensively across Europe, Asia and the US. We trained over 5,000 marketers and ran over 200

public training courses in 2012.

Join Econsultancy today to learn what’s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 971 0630 (New York). You

can also contact us online.

Other related Econsultancy reports and content

Real-Time Bidding (RTB) Buyer’s Guide

http://econsultancy.com/reports/rtb-buyers-guide

Quarterly Digital Intelligence Briefing: Making Sense of Marketing Attribution

http://econsultancy.com/reports/quarterly-digital-intelligence-briefing-making-sense-of-marketing-attribution

Advertising Statistics

http://econsultancy.com/reports/advertising-statistics

Best Practices in Digital Display Advertising

http://econsultancy.com/reports/best-practices-in-digital-display-advertising

Cross-Channel Marketing Report

http://econsultancy.com/reports/cross-channel-marketing-report

Best Practices in Data Management

http://econsultancy.com/reports/best-practices-in-data-management

Online Advertisers Survey Report 2013

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

4. About Rubicon Project Rubicon Project pioneered advertising automation and is now doing for advertising what

companies like NASDAQ did for stock trading. The company’s automated advertising platform is

used by more than 500 of the world’s premium publishers to transact with over 140,000

advertisers globally.

A company driven by innovation, Rubicon Project has engineered one of the largest real-time

cloud and Big Data computing systems, processing trillions of transactions each month within

milliseconds. According to comScore, Rubicon Project reaches 95 percent of U.S. Internet users

per month and is ranked #1 in reach. The company’s customers include eBay, TIME, ABC News,

the Wall Street Journal, Tribune Company, Virgin Media, People, Universal and legions of other

Fortune 500 companies. Headquartered in Los Angeles, the Rubicon Project has ten offices across

the globe including New York, San Francisco, Seattle, Sydney and London.

Online Advertisers Survey Report 2013

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

5. Methodology and Sample This is Econsultancy’s third Online Advertisers Survey Report, produced in association with

Rubicon Project and based on our 2013 Online Advertising Survey.

The research, supported by the AOP and the IAB UK, follows similar pieces of research carried

out in 2009 and 2011. This year’s study is based on a survey of more than 1,000 online advertising

professionals carried out in August 2013. The breakdown of survey respondents is shown in

Figure 1 below.

The total number of respondents in 2013 is a record for this research.

This report is specifically focused on results from more than 650 advertiser and agency

respondents. A separate Online Publishers Survey Report (based on the data from nearly 400

online publishers and sales houses) will be available from October 2013.

Information about our 2013 Online Advertising Survey, including the link, was emailed to

Econsultancy’s user base and promoted online via social channels. Rubicon Project also promoted

the survey to its database of customers and partners.

We are also grateful to the Association of Online Publishers for publicising the survey to its

members.

The incentive for taking part was access to a free full copy of both the Online Advertisers and

Online Publishers reports just before their publication by Econsultancy.

Figure 1: Which of the following best describes the company you work for?

Respondents: 1061

Online Advertisers Survey Report 2013

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The charts in this report are shown for a combined global audience of advertisers (client-side

marketers) and agencies, described collectively within this report as advertisers. The geographical

split for respondents is shown in Figure 21 within the appendix to this report. It can be seen that

the UK (39% of advertiser respondents) is the best represented country in the survey.

If you have any questions about the research, please email Econsultancy’s Research Director,

Linus Gregoriadis (linus@econsultancy.com).

Online Advertisers Survey Report 2013

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and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2013

6. Findings

6.1. Online advertising: buying and spending

6.1.1. Spending trends

Figure 2 shows whether spending on particular online advertising channels has gone up or down

over the past year, revealing that the majority of advertisers have increased investment across the

board.

Reflecting the continued growth of Facebook as an advertising platform, the most buoyant area of

investment continues to be Facebook advertising, where 68% say they have increased spending

in the last 12 months, compared to 71% who said the same in the 2011 survey (Figure 3). The least

buoyant channel is the Google Display Network which has seen 12% of respondents decrease

their investment over the last year, though 52% have increased their spend here.

…

Figure 2: Has your spending on the following channels gone up or down in the

last year?

Respondents: 535

…

Online Advertisers Survey Report 2013

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6.1.2. Display advertising prices

Almost half of the advertisers surveyed (48%) said that the price of display advertising has

increased in the last year, with a further 41% saying that it has remained the same. A fifth (22%)

have noted a decrease in price.

Figure 3: Has the price of display advertising gone up or down in the last year?

Respondents: 479

…

6.1.3. Budget shifts

Figure 8 shows the extent to which advertisers have shifted budgets between channels over the

last year, including a comparison with 2011 data. Changes in proportions of budget are a

reflection of the desire to extract maximum value from online advertising spending, and the

growing use of marketing attribution technology to find the right balance.

Just over a quarter (28%) of respondents have…

…

6.1.4. How display advertising is bought

Figure 9 shows the proportion of advertisers using online advertising networks, online ad

exchanges, demand-side platforms (DSPs) and sales houses (or rep firms).

Showing an increase since 2011, almost three-quarters of respondents buy display advertising

using…

Online Advertisers Survey Report 2013

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6.1.5. Use of data

Table 1 shows that the global average proportion of ad planning and buying based on first party

data is 42%. The equivalent figure for third party data is 31%. Only 17% globally say they use no

data.

The data for the UK, US, France, Germany, and APAC is also shown in Table 1, which shows that

these countries/regions (with the exception of France) base more of their ad planning and buying

on first party data than the global average. However, particularly in the APAC region, ad

planning and buying based on no data is also carried out by a higher proportion of respondents

than the global average.

Table 1: What proportion of your ad planning and buying is based on data?

Respondents: 250

Online Advertisers Survey Report 2013

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6.2. Real-time bidding and targeting

6.2.1. Advantages of real-time bidding

Real-time bidding (RTB) has fundamentally changed the way that online advertising is bought

and sold, giving advertisers greater control over where their ads appear and in front of what

audience.

Figure 10 shows that advertisers have realised the advantages of RTB more fully since 2011, with

increases in the proportion of respondents seeing each advantage having increased across the

board.

Online Advertisers Survey Report 2013

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6.3. Trading desks and demand-side platforms

6.3.1. Spending with trading desks

The chart below shows the average proportion of online display advertising budget that goes to

agency trading desks. One fifth attribute 0% of their budget to their agency’s trading desk, and at

the other end of the spectrum, another fifth assign 91-100%. For the remaining respondents,

there is a slight trend towards assigning up to 60% of their budget to their trading desk.

Figure 4: How much of your online display advertising budget goes via agency

trading desks (your own or independent trading desks)?

Respondents: 357

…

Online Advertisers Survey Report 2013

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6.3.2. Trading desk spend on real-time bidding

Figure 12 shows the respondents’ trading desk spend via real-time bidding. Just under two-thirds

(63%) of advertisers say that less than half of their trading desk spend goes on real-time bidding,

with…

Figure 5: What proportion of trading desk spend is spent via real-time bidding

(RTB)?

Respondents: 327

6.3.3. Number of demand-side platforms

Figure 13 shows that three quarters of advertisers and agencies who use demand-side platforms

work with up to three DSPs…

…

6.3.4. Benefits of working with demand-side platforms

Figure 14 shows the relative importance of different benefits of working with demand-side

platforms.

As was the case in 2011…

6.3.5. Challenges faced when working with demand-side platforms

The main challenge faced by those working with demand-side platforms is liquidity (availability

of inventory)…

…

Online Advertisers Survey Report 2013

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6.4. Private marketplace deals Private marketplace deals began to be implemented recently to allow sellers and buyers more

control over which opportunities are surfaced and sold. As defined in the Econsultancy Real-

Time-Bidding Buyer’s Guide:

“…private marketplaces allow publishers to make available a segment of their inventory to a

specific advertiser or group of advertisers, set and adjust pricing floors by analysing the bid

landscape and optimise yield.

“Private bidders operate within a tightly controlled bid range and have access to premium

inventory that is only exposed to a small bidding pool.”

…

Online Advertisers Survey Report 2013

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7. Appendix: Respondent Profiles

7.1. Annual company turnover Figure 19 shows the split of advertiser and agency respondents by size of annual turnover. In the

UK and Europe, the highest proportion of companies had turnovers of <1 million (£ and €

respectively). In the US/Canada, companies were most likely to have a turnover of $1-10 million.

Figure 6: What is your annual company turnover (revenue)?

Respondents UK: 127

Respondents Europe: 59

Respondents US / Canada: 140

…