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MediaPost: 2009 Is The Year Of Ad Exchanges

With the balls of a full-grown Brahma, MediaPost has stepped forward and declared that 2009 is the year of the ad exchange.   We couldn’t agree more.

MediaPost and Media6’s Joe Doran writes:

“2008 saw the dominance of the exchange marketplace by RightMedia with ContextWeb’s ADSDAQ not far behind, but 2009 will see new entrants across the industry from Fox, Y! APT, Microsoft, Appnexus, BlueKai and many, many more.”

Wow,  Joe.  AdECN totally dissed.  Where’s DoubleClick’s Ad Exchange here?  Missing in action and perhaps with good reason as their invitation-only, beta continues.  (See below for another idea.)

Doran adds that the need for transparency will drive the ongoing adoption by ad agencies of advertising exchanges as an important component of their online advertising strategies.

We “see” Doran’s ante and “raise” with more reasons for a big step forward by ad exchanges in 2009:

1.  Publishers will have more unsold inventory than ever as they create more content while trying to capture their share of flat growth in advertising dollars YOY.

2.  Advertisers demand transparency.  Yes, Joe said that.  They’ll demand transparency, though, because the dollars they control will be more scrutinized then ever.

3. Ad exchanges provide lift to the limited inventory of search.  As Comscore showed, display advertising can provide significant lift to integerated ad campaigns.  This is great news for display ad exchanges and the tools which can tie all these together such as ClearSaleing and Microsoft’s Engagement Mapping initiative to name a few.

And finally, we’re “doubling down”!…..

4. Google will come out with the big Magilla of advertising exchange strategies incorporating the DoubleClick Advertising Exchange, AdSense and AdWords.

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Ad Exchange Research: Comscore Makes The Case for Display Advertising

As we said back in September, the online display advertising business is sorely in need of an analytics package showing that the exposure of online display ads to the consumer can be tied directly to the performance of other campaigns including search - organic or paid.

We even postulated that ComScore might be in a position to provide this type of critical research for which online display advertising exchanges and networks are so desperate in order to sell to their clients.

Well, whaddya know? ComScore has come through for its client base of ad exchanges and networks in a new white paper called “Whither the Click.” (Get it here.) Thanks to MikeOnAds and Fred Wilson for the heads up.

Leveraging its 2 million member panel and aggregating a couple hundred ad effectiveness studies from its Brand Metrix product line, the Comscore research was presented by Gian M. Fulgoni and Marie Pauline Mörn to attendees of the
“Empirical Generalizations In Advertising Conference” in early December at the Wharton School.

DoubleClick Ad Exchange, Right Media Exchange, AOL Platform A’s BidPlace etal., should make this data mandatory in all initial presentations made by sales reps to potential clients.

As you can see, even offline, the benefits of an online display ad campaign are impressive.

As marketers look to expand beyond the limited and often expensive inventory of high performing search, data like ComScore’s will be critical. ClearSaleing and Microsoft are also making strides with their analytics products.

And, as these products become more widely available, marketers will understand that if they want to drive significant revenues and profit, they can do it through display advertising, a little understood component of the performance marketing toolkit.

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Glam Media Cuts Back On Salaries; GlamX Exchange Flounders

As reported yesterday by Mike Arrington of TechCrunch, Glam Media is scaling back its expenses according to internal email (but external, too!) in the form of reduced compensation for its salaried employees ranging from 3-15%.  Executives will receive up to 60% reduction in salary which might be offset by bonuses if things aren’t so bad with the U.S. economy in 2009.  We wonder if the “non-executive” employees will be similarly compensated if things take off again.

Arrington postulates that many executives will likely stay at Glam in spite of reductions due to wider economic turmoil.  We think different.  The job market for top digital people remains strong from anecdotal evidence, and given Glam’s lack of proprietary technology (or anything else) and therefore vulnerable future, there appears to be no reason to stick around if something better comes along.

On the GlamX Exchange front, the internal email reveals the following:

“Glam chose to have very limited Ad Networks fill in its inventory using GlamX Exchange, a sector hit very hard in the downturn. This conservative strategy has helped build a stronger direct sales business—we could have had more revenue, but then we would have been looking at lower or even negative growth.”

What to make of this?   Apparently the Exchange at Glam is not producing revenue that is of interest to Glam.  Or, is it that the GlamX Exchange is not producing a revenue opportunity for ad networks that make them want to buy and sell through the GlamX Exchange?  No doubt the ad network and exchange models have been “dinged” like the entire online ad industry.    Glam wants us to believe that it’s the exchange model or “sector,” stupid. Hmm.

We can’t blame them for moving away from their exchange in that Glam Media makes their dollar as a vertical ad network… it doesn’t seem like the exchange “sector” is the problem, though.

The exchange bandwagon may have just lost a passenger.

Posted in Ad Networks, Online Advertising | No Comments »

Recent Advertising Exchange Linkage: Mike On Ads, Anil Batra, Ashu Garg and More

Ashu Garg’s recent post entitled “Data Liquidity” brings light to the growing data exchange model including  data traders, BlueKai, and yield optimizers, AdMeld, who have absorbed millions in cash from venture firms this year.

Mike On Ads is looking for rumors on what’s going on with Google’s display advertising strategy.

OK, this post was from November, but check out Greg Linden’s post on wacky research from Yahoo! on not advertising.

Anil Batra is hosting a poll on whether or not you would pay $1 per month to have advertising taken off your favorite website.   (Keep that advertising running - it’s beautiful, isn’t it?)

Right Media still hasn’t made a post on its blog since September.  Traffiq hasn’t posted since August. Come on! Spread the Exchange love!

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Yahoo!’s Right Media Exchange Offers Transparency Tool to UK Advertisers

Today, Yahoo!’s Right Media distributed a press release in the UK about its new transparency offering, Marketplace Select, for advertisers - undoubtedly a response to recent embarassments uncovered by UK’s New Media Age among others.

According to today’s New Media Age:

• “[Marketplace Select] comes after Right Media has been implicated in ad misplacement issues, the most recent of which found ads from top brands such as Orange and Virgin Media running across US fighting site Onlyfights.com (Online advertising hit again by misplacements; nma 19 June). The exchange also faced scrutiny when new media age found a site running 12 banner ads from brands including Virgin Media and O2 on one page (Ad exchanges face scrutiny over misplacement; nma 21 February).”

In the release, Denise Colella, VP International at Right Media, says that “this solution can help give buyers greater confidence to scale their overall budgets on the platform, which ultimately benefits all Exchange members.”

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Video: What’s The Difference Between an Ad Network and an Ad Exchange?

ContextWeb, makers of the ADSDAQ contextual advertising exchange, has published a video on its blog from an entertaining panel at the recent OMMA Ad Nets conference in New York City. Featuring participants in the ad exchange space from Yahoo!’s Right Media and APT, DoubleClick Advertising Exchange, ContextWeb/ADSDAQ and two agency reps, the panel helped outline the differences between the ad network and advertising exchange models.

In our “book,” the online advertising exchange model provides the tools for buyers and sellers of online media to trade online advertising. Revenue to the exchange is often transactional.

The ad network model is that of “trader.” They buy and sell media and earn the difference between what they buy from the publisher and what they sell to the advertiser.

We’d like to say that once and for all this panel answers the question of what’s the difference between an ad network and an ad exchange. But, as you’ll see, there’s still some disagreement on the definition of an ad exchange.

To view the video, click below:

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Ad Exchange and Network Optimizer, AdMeld, Hires Barrett, Former Fox Exec

New York City-based AdMeld, a platform provider of advertising exchange and network optimization tools, announced that it has signed on as its CEO Michael Barrett, former Chief Revenue Officer at Fox Interactive Media (FIM) and EVP of Sales at AOL Media Networks.

In the press release announcing the new hire, Benjamin Barokas, co-founder and Chief Revenue Officer of AdMeld, from JumpTV and AOL, provided a bit of light on what exactly AdMeld does saying, “AdMeld removes complications when dealing with multiple networks and exchanges. No longer do publishers have to deal with disparate tags, interfaces, and conflicting statistics. Our platform increases yield while reducing the resources needed to pull reports, evaluate data, and re-prioritize campaigns in a traditional ad server.”

After an eight-month beta program of its platform according to the release, it would appear AdMeld will compete directly with companies such as Rubicon Project and PubMatic already in the publisher yield management space.

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Posted in Online Advertising, Yield Management Tools | No Comments »

AdECN Asks Ad Networks To Try Federated System

No, Federated Media has not suddenly become part of AdECN, and by association, Microsoft.

Apparently, AdECN is ready to test its new ad exchange platform called the Federated System and is asking that interested ad networks come and test the new version of the advertising exchange before it reaches a wider public release in 2009 according to the AdECN press release and an article in MediaPost.

The key difference in the new system (announced during AdTech New York) in comparison to competing exchanges according to AdECN is that Federated will “allow its members to price every ad impression in the auction, so display ad impressions aren’t undervalued or overvalued.” We’re not sure exactly what this means but assume that based on knowledge from previously served, similar impressions, the Federated System will provide performance/behavioral and/or contextual metrics for current available “spot” inventory.

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AdWeek Claims Display Can Be Like Search - Just Add Self-Serve

The suggestion in last week’s AdWeek article by Brian Morrissey, “Can Search’s ‘Beautiful System’ Extend to Display?,” is that all any advertising exchange or ad network needs is a self-service system which allows advertisers to easily create graphical display ads and, poof!, you’ve got nearly unlimited inventory available with search advertising-like revenue potential.

Even the oft-quoted Greg Sterling of Sterling Market Intelligence gets on the bandwagon saying, “There isn’t a reason that (self-service ad platforms) couldn’t happen to display, except that display is more involved,” said Greg Sterling, an industry analyst with Sterling Intelligence. “There’s layers of complexity for display that haven’t existed in the search marketplace.” This is the wrong direction - it’s not about making pretty banners, it’s about the analytics that show ROI.

As we’ve said before, for Display to truly become a powerful tool and scale revenues for web publishers - analytics which can be tied across multiple campaigns and user activity will be necessary to prove Display is worth investment for advertisers.

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MediaWeek: APT? Go Back to Your Content Yahoo!

In an October 13 article, Mike Shields from MediaWeek provides his opinion on Yahoo!, the new APT platform and future direction for the struggling, Web media monolith.

Shields reveals that, to-date, no agencies have signed up for the platform and “only the San Jose Mercury News and the San Francisco Chronicle newspapers” - presumably on the publisher side rather than trying to extend their reach through the platform as advertisers buying on the behalf of their directs.

What remains unclear to AdExchanger is how the Right Media Exchange fits into the puzzle here. APT is built with Right Media’s model in mind according to Yahoo! (see below). RMX already has made prominent deals with agencies such as the deal announced last May between WPP and Right Media. This will help bring agencies to APT presumably.

Yahoo!’s APT FAQ offers this explanation:

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Rubicon Project Sheds Light on Ad Networks and Exchanges

On Tuesday, ThinkPanmure analysts Bill Morrison and Robert Coolbrith hosted an investor call with Frank Addante, CEO, The Rubicon Project. The Rubicon Project goal is to optimize ad network and ad exchange relationships for web publishers and increase their effective CPM for remnant display advertising - or “make mad cash” as Rubicon likes to say.

More info from ThinkPanmure:

The company currently has approximately 1,300 publisher customers and optimizes approximately 11 billion advertising impressions per month (representing 240 million unique Internet users worldwide), providing Rubicon with a relatively unique view on non-premium display pricing and volume trends.

Rubicon is also well-known for its over-the-top booth at AdTech San Francisco in April of this year.

There must have been a hundred Rubicon supporters, employees and other ne-er-do-wells with their black t-shirts swirling about the Rubicon spaceship on the show floor. In that Rubicon appears to target Long Tail publishers primarily, it seemed odd that they would have such a huge booth at a show targeting large publishers, but they do claim to work with 4 of the top 5 newspaper publishers. Were they trying to sell the company? Initiative aimed at large pubs? Dunno.

But, we digress.

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The New Yahoo! Ad Platform: APT (Was: AMP, APEX)

Amid the Advertising Week hubbub in New York City, Yahoo! has announced the launch of its new ad platform, APT, largely dependent on the Right Media Exchange acquired last year by Yahoo!.

With Yahoo!’s Newspaper Consortium desperate for revenues, they will be the first to try out the new platform followed by advertisers, agencies and ad networks according to Paid Content who covered Yahoo!’s APT event.

It should be noted Yahoo!’s Publisher Network contextual technology, or a reasonable facsimile, could be a key component for realizing the value of newspapers’ online inventory. With contextual placement in each day’s news an important targeting capability for advertisers, it would seem that even though advertisers can buy sites through Right Media, wouldn’t it be compelling to buy “Home and Garden”, too?

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Please Welcome, The AOL Advertising Exchange, BidPlace

It’s official.

AOL’s long-rumored entry into the advertising exchange business is here and covered in today’s edition of MediaWeek by Mike Shields among other online news outlets.

According to the release:

“BidPlace will allow advertisers to submit bids for CPM, CPC and CPA advertising on AOL, on select partner sites and on Platform-A’s third-party network, which combined reaches 90% of the online audience, according to the August 2008 comScore Media Metrix report.”

BidPlace? Hmmm. We’re surprised they wanted to use this name - kinda generic. But, it’s AOL. It must have been vetted, right? (bidplace.com points to a domain squatter.)

As Mike Shields points out, BidPlace is an ad exchange, remnant play and gives AOL another opportunity to increase revenues of their massive, non-premium, remnant inventory.

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Latency Rears Its Ugly Head at RightMedia

A favorite bugaboo with which publishers like to challenge ad exchanges and networks is latency - the amount of time it takes to serve an ad. RightMedia appears to be suffering a bad case of it according to yesterday’s VentureBeat.

VB adds that there is a ton of research out there saying the loss in revenue due to latency in advertiser campaigns is real and significant.

RightMedia confesses in the article and blames it on rapid growth:

“As with all rapid growth, [Right Media has] also faced some recent performance issues with latency of ad serving. We deeply regret the impact this may have had on our customer’s businesses.”

In the post, VentureBeat’s Jake Swearingen asks for more input from the advertising community. We’ll be curious what he turns up.

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Right Media Offers Ad Exchange Comment on Net Imperative

Roger Williams, Director of International Marketing at Right Media, was able to place a nice article in UK’s Net Imperative on online advertising exchanges entitled, “Platforms for Change“.

Within the advertiser-focused article are the basics to the Right Media Exchange story including providing tools to advertisers that allow efficient targeting through an open auction. Williams provides examples of ad exchange platforms developing online for other mediums such as MediaEquals, “an online trading platform for offline media covering press, inserts and display, as well as outdoor,” and Bid4Spots which “hosts a weekly online auction of radio spots available the following broadcast week.”

What’s missing in this article is a cohesive argument for brand-safe opportunities for the advertiser. Near the end, Williams takes a shot at it:

“For any online business, brand sanctity is a real concern, which makes the controls offered by exchanges very important. Without this level of control, the dramatic level of growth in exchanges would not have been possible.”

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Four Ad Exchanges Featured on ClickZ

ClickZ media buying writer, Tessa Wegert, completes the second of her two-parter on ad exchanges this week. See #2 on ClickZ: “Getting to Know the Ad Exchanges.”

Wegert highlights just four of the ad exchanges - only Google/DoubleClick, Yahoo!’s Right Media Exchange (RMX), ContextWeb’s ADSDAQ and Microsoft AdECN were worthy of mention to Wegert. (GlamX, AdBrite, what happened to Turn?, BlueKai, Traffiq)

But, any article on ad exchanges at this early stage of the game is a good article even when its filled with exchange-supplied marketing speak. Example of said speak comes in the AdECN blurb:

“AdECN calls its pricing model “value-based pricing”; through its auction system, advertisers can buy on a per-impression basis and pay only what they deem an impression to be worth to them and their clients.”

Oh really?

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Turn Opens New York Office

In Friday’s edition of MediaPost, Turn, Inc. announced that it has opened a four-person New York office to serve as its East Coast headquarters.

“Jim Clark, the company’s regional vice president for East Coast sales, will lead the branch, which is expected to add two more people by year’s end.”

For the complete release on Turn’s website, click here.

It is curious to note that Turn is calling itself “the Smart Market” and there is no mention of the word ad exchange in the release.  Has Turn changed it’s mind?  MediaPost calls it an “ad network.”

We’re guessing that with the current “remnant” connotation for exchanges, Turn may be trying to push a “premium” solution that hasn’t resonated as “remnant” with brand advertisers thus far.

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ThinkPanmure: Now Entering Phase II of Media Recession

Bill Morrison, Senior Analyst at ThinkPanmure and one of the few Wall Street analysts with an understanding of ad exchanges, stated in his industry report released today that advertising is entering Phase II of a media recession. Morrison explains his thinking:

“First, marketers reduce spot market activity and eliminate quarterly budget flushes. Then, marketers begin canceling “up-front” commitments and previously signed advertising contracts. Lastly, marketers begin to rationalize/reduce budgets for future years. Our research suggests that we entered phase two of the current media recession during 3Q. Our recent conversations with online publishers revealed a significant number of advertisers that have cancelled contracts or significantly reduced commitments for the second half of 2008. The majority of industry contacts we spoke with this quarter said fundamentals weakened from 2Q to 3Q.”

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BlueKai Enters With New Advertising Exchange

According to CNET’s Stephanie Olsen, Bellevue, Washington-based, BlueKai will unveil its new ad exchange on Monday.

After raising a $3.1 million investment from Redpoint Ventures in Q1 of this year, the company founded by Medio Systems and Revenue Science advertising executive Omar Tawakol is ready to tell what all the secrecy has been about these past few months.

In Olsen’s interview with Tawakol that was published this past Friday, Tawakol revealed BlueKai is creating a data ad exchange centered around behavioral ad targeting.

Olsen describes how it will work in the simplest terms:

“One targeting trick is to collect data about what someone does at one site, (e.g., reading a Las Vegas travel article at CNN.com), and then target an ad (e.g., cheap flights to Vegas) while they’re visiting another site.

BlueKai wants to play middleman in that equation.”

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Ad Exchanges Featured on ClickZ

In ClickZ today, writer Tessa Wegert elevates the ad exchange cause with her article entitled, “Understanding Ad Exchanges.” Ironically, the article is sponsored by ad network, Tribal Fusion. Not sure how TF felt about it - oh well.

Wegert discusses one of the main differences between ad networks and exchanges: ad networks act as middlemen, ad exchanges provide tools for buyers and sellers to come together and trade advertising.

Nice to see the ad trades catch the ad exchange drift, again. Wegert points to Yahoo!’s integration plans for Right Media, ContextWeb’s recent funding, (she forgot Turn - they received big bucks, too) and the press release juggernaut Glam Media with its GlamX vertical ad exchange as recent, ad exchange, momentum milestones.

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