Comments on: Yield Optimizers Poised To Migrate To Exchange Model Says ThinkEquity’s Morrison and Coolbrith http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/ Digital media optimization news and discussion website. Mon, 15 Mar 2010 20:41:54 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Zach Coelius http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-646 Zach Coelius Thu, 21 May 2009 17:43:25 +0000 http://www.adexchanger.com/?p=2362#comment-646 Michael is absolutely right that the exchanges are only as good as the inventory that is in them. If all we can buy on exchanges is porn, torrents, warez and spam, they will never become much of anything. He makes a fundamental mistake of assumption when he states that the past inventory problems of exchanges of poor quality are likely to continue into the future. There is huge difference between the exchanges of the past and the next generation of real time exchanges that are coming out now. The old exchanges were opaque and you never knew where your ad was running. This resulted in good inventory being watered down by bad inventory when both were thrown into the same bucket and commodified. CPMs went down for good publishers as a consequence, they kept their inventory out of the exchanges and all that was left was the junk. The new real time exchanges are totally different. Because each available impression is transparently exposed to the bidders, it becomes possible to account for the value of each domain and bid accordingly. With such transparency, good inventory gets paid what it deserves and no longer is disincentivised to stay out of the exchanges. For instance, here at Triggit we have standing bids for all top tier properties that are exponentially higher then what we bid for long tail inventory. I am willing to bet a fine bottle of Bordeaux that as premium domains start to see their CPMs increase on the exchanges that we will see more and more of them using that channel for their remnant by years end. And if that happens, I think we will start to see the true potential of the exchanges begin to blossom in a big way. Michael is absolutely right that the exchanges are only as good as the inventory that is in them. If all we can buy on exchanges is porn, torrents, warez and spam, they will never become much of anything. He makes a fundamental mistake of assumption when he states that the past inventory problems of exchanges of poor quality are likely to continue into the future. There is huge difference between the exchanges of the past and the next generation of real time exchanges that are coming out now. The old exchanges were opaque and you never knew where your ad was running. This resulted in good inventory being watered down by bad inventory when both were thrown into the same bucket and commodified. CPMs went down for good publishers as a consequence, they kept their inventory out of the exchanges and all that was left was the junk. The new real time exchanges are totally different. Because each available impression is transparently exposed to the bidders, it becomes possible to account for the value of each domain and bid accordingly. With such transparency, good inventory gets paid what it deserves and no longer is disincentivised to stay out of the exchanges. For instance, here at Triggit we have standing bids for all top tier properties that are exponentially higher then what we bid for long tail inventory. I am willing to bet a fine bottle of Bordeaux that as premium domains start to see their CPMs increase on the exchanges that we will see more and more of them using that channel for their remnant by years end. And if that happens, I think we will start to see the true potential of the exchanges begin to blossom in a big way.

]]> By: Michael Katz http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-639 Michael Katz Thu, 21 May 2009 05:11:52 +0000 http://www.adexchanger.com/?p=2362#comment-639 The issue that will prevent the exchanges from realizing their greatest potential is that exchanges will only ever be as good as the players who are on them. Historically speaking, they have been plagued by lower quality inventory. Adding data to exchanges will help but the end result will still be outperformed by the combination of data plus inventory in more premium environments. So even though there have been great improvements over the past couple years to the quality of inventory on exchanges, overall inventory quality is still a big problem with exchanges. Users absolutely respond differently to the same advertiser message given the environment they are in and until the quality of inventory on the exchanges improves greatly it will be very difficult to harness the potential of exchanges. In short, adding data to the inventory within the exchanges will help to improve the overall relevancy that the exchanges have but we are far from any kind of silver bullet. The issue that will prevent the exchanges from realizing their greatest potential is that exchanges will only ever be as good as the players who are on them. Historically speaking, they have been plagued by lower quality inventory. Adding data to exchanges will help but the end result will still be outperformed by the combination of data plus inventory in more premium environments. So even though there have been great improvements over the past couple years to the quality of inventory on exchanges, overall inventory quality is still a big problem with exchanges. Users absolutely respond differently to the same advertiser message given the environment they are in and until the quality of inventory on the exchanges improves greatly it will be very difficult to harness the potential of exchanges. In short, adding data to the inventory within the exchanges will help to improve the overall relevancy that the exchanges have but we are far from any kind of silver bullet.

]]> By: Great Q&A of the Think Equity guys › Triggit http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-634 Great Q&A of the Think Equity guys › Triggit Wed, 20 May 2009 20:50:40 +0000 http://www.adexchanger.com/?p=2362#comment-634 [...] at adexchanger.com has a great post today with a Q&A of Bill Morrison and Robert Coolbrith who are equity analysts at ThinkEquity Partners. They have an awesome report called “The [...] [...] at adexchanger.com has a great post today with a Q&A of Bill Morrison and Robert Coolbrith who are equity analysts at ThinkEquity Partners. They have an awesome report called “The [...]

]]> By: Zach Coelius http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-633 Zach Coelius Wed, 20 May 2009 20:30:40 +0000 http://www.adexchanger.com/?p=2362#comment-633 Great post Joe, easily one of your best Q&As. The Think Equity guys are totally right on the future on business. All the near term issues are still to be worked out, but things are moving forward faster and faster everyday. They are correct in predicting that RTB will enable the buyside to pay more for quality inventory, we are already seeing it at Triggit for our buys. Though that increased efficiency also means that junk impressions will be priced down to near zero and some pubs will have to clean up their act. I can vouch for some of the things that Eric says. The Pubmatic guys are doing an awesome job of moving the ball forward on the technology front. At Triggit we have been super impressed with their foresight and effort. They along with AppNexus are doing a great job pushing RTB forward. I think Josh is totally right the until a dominate exchange emerges there will be a place for the yield optimizers to broker impressions across them. Great post Joe, easily one of your best Q&As. The Think Equity guys are totally right on the future on business. All the near term issues are still to be worked out, but things are moving forward faster and faster everyday. They are correct in predicting that RTB will enable the buyside to pay more for quality inventory, we are already seeing it at Triggit for our buys. Though that increased efficiency also means that junk impressions will be priced down to near zero and some pubs will have to clean up their act.

I can vouch for some of the things that Eric says. The Pubmatic guys are doing an awesome job of moving the ball forward on the technology front. At Triggit we have been super impressed with their foresight and effort. They along with AppNexus are doing a great job pushing RTB forward.

I think Josh is totally right the until a dominate exchange emerges there will be a place for the yield optimizers to broker impressions across them.

]]> By: Josh McFarland http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-632 Josh McFarland Wed, 20 May 2009 19:03:09 +0000 http://www.adexchanger.com/?p=2362#comment-632 Let's also not forget that the report acknowledges at least three major ad exchanges, and that the yield optimizers will eventually broker between them on a publisher's behalf. It will be a while before any one exchange has decent coverage on all inventory; until then, pubs will still want to swap out providers when the exchange starts falling over to cheap house/CPA ads. Let's also not forget that the report acknowledges at least three major ad exchanges, and that the yield optimizers will eventually broker between them on a publisher's behalf. It will be a while before any one exchange has decent coverage on all inventory; until then, pubs will still want to swap out providers when the exchange starts falling over to cheap house/CPA ads.

]]> By: eric klotz http://www.adexchanger.com/analysts/thinkequity-bill-morrison-robert-coolbrith-ad-exchanges/#comment-631 eric klotz Wed, 20 May 2009 15:16:46 +0000 http://www.adexchanger.com/?p=2362#comment-631 Thanks Joe for another good Q&A. I'd like to clarify something regarding the "yield optimizers" referred to here and in the report. PubMatic absolutely agrees that "dynamic" allocation of inventory is very important for increasing publisher revenue, but what isn't clear in the ThinkEquity report or in this Q&A is that only PubMatic has true real-time allocation of inventory, and we have it for every single impression. Additionally the dynamic daisy chain solution and API referred to here and in the report are also exclusive to PubMatic. These technologies offer a significantly more powerful method for ad revenue monetization than simply having outsourced ad operations. Bill and Robert made a great report, but all of the technology they are referring to in the "yield optimization" space is exclusive to PubMatic. While "yield optimizers" might share a common goal, we have different approaches. - Eric Klotz, PubMatic Thanks Joe for another good Q&A. I'd like to clarify something regarding the "yield optimizers" referred to here and in the report.

PubMatic absolutely agrees that "dynamic" allocation of inventory is very important for increasing publisher revenue, but what isn't clear in the ThinkEquity report or in this Q&A is that only PubMatic has true real-time allocation of inventory, and we have it for every single impression. Additionally the dynamic daisy chain solution and API referred to here and in the report are also exclusive to PubMatic. These technologies offer a significantly more powerful method for ad revenue monetization than simply having outsourced ad operations.

Bill and Robert made a great report, but all of the technology they are referring to in the "yield optimization" space is exclusive to PubMatic. While "yield optimizers" might share a common goal, we have different approaches.

- Eric Klotz, PubMatic

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