exchange dynamics: a history of exchanges
DESCRIPTION
Walton Comer and Michael McCrary, President of Federated Sample give an inside look into Exchange Dynamics and the history of exchanges at SampleCon 2013.TRANSCRIPT
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SampleCon 2013 Exchange Dynamics
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Exchange Dynamics Who is Walton?
• Co-Founder, Investor and Board Member.
• Colloquially, known as a “quant” on Wall Street.
• A practitioner of derivative pricing and high frequency trading.
• He’s traded more than half a trillion dollars of commodities.
• Including enough crude oil to run North America for over half a year.
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Exchange Dynamics How supply meets demand
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Exchange Dynamics How supply meets demand
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Exchange Dynamics How supply meets demand
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Exchange Dynamics How supply meets demand
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Exchange Dynamics Impact on liquidity
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Exchange Dynamics Impact on liquidity
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Exchange Dynamics Impact on liquidity
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Exchange Dynamics Impact on liquidity
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Exchange Dynamics Transformative impact
A
E
C B
D X
E
C B
D A ● Transactions ● Netting ● Credit risk
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Exchange:
Record of Transactions
• Set transaction rules
• Set consequences
• Maintain method of recording transactions
Exchange Dynamics Exchange and clearing recap
Clearing:
Record of Fulfillment
• Rules for delivery, payment & reconciliation of disputes
• Netting: Centralized payment • Centralize credit risk
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Exchange Dynamics Effects of commoditization
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SampleCon 2013 Online Advertising
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Proprietary and Confidential
Medium Options
Network Television ABC, CBS, NBC, FOX
Cable Television ESPN, TNT, TBS, MTV
Radio Clear Channel, Cumulus, Pilot, Local
Magazine Time, Conde Nast, Hearst, Meredith
Newspaper Gannett, NYT, WSJ, Local
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Proprietary and Confidential
• Annual Up-Front Agreements • Audiences at Scale Achieved with Major Media Firms • Significant Barriers of Entry for New Players • Defined or Costly Limits for Placement Opportunities
• Television & Radio have limited minutes per day • Print happens page limits
• Ad Sizes are defined and simple • Broadcast 30 & 60 second spots • Print – full page, half page, some smaller units
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Proprietary and Confidential
• A New Medium Emerges • Incumbent Media Giants Copy Offline to Online • A New Wave of Options Emerge
• Yahoo • AOL • Google • Facebook
• And Millions of Other Options
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Proprietary and Confidential
• Audiences of Scale Are Possible, however; • It’s Unmanageable to Match Supply & Demand • Even Major Publishers Can’t Sell Every Available Unit • Lower Barriers of Entry Lead to Glut of Supply • Price Compression Resulted
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Proprietary and Confidential
• A Media Buyer Uses a DSP to Place Ads • Major Publishers Still Sell Direct “Guaranteed
Impressions” with Large Buyers at Higher CPM’s • Major Publishers Make Unsold Inventory Available on
Exchanges as “Non Guaranteed” Impressions • Smaller Publishers Sell More “Non Guaranteed” than
Guaranteed • When a Page is Loaded, the Guaranteed Direct
Impressions are Served and; • All other Ad Units are Filled Through Exchanges • Often the Same Ad Serving Technology Handles Both
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Proprietary and Confidential
• Media Buyer Uses a DSP to Place Ads • Publishers Use SSP to Sell and Serve Ads • Major Publishers Still Sell Direct “Guaranteed
Impressions” with Large Buyers at Higher CPM’s • Major Publishers Make Unsold Inventory Available on
Exchanges as “Non Guaranteed” Impressions • Smaller Publishers Sell More “Non Guaranteed” than
Guaranteed • When a Page is Loaded, the Guaranteed Direct
Impressions are Served and; • All other Ad Units are Filled Through Exchanges • Often the Same Ad Serving Technology Handles Both
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Proprietary and Confidential
64 62 62 58
36 38 38 42
0
10
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Q1 Q2 Q3 Q4
Channel Mix 2011
UNRESERVED RESERVED