Comments on: Beyond The Hype: Why Real-Time Bidding On Ad Exchanges Is Challenged http://www.adexchanger.com/data-driven-thinking/beyond-the-hype-why-real-time-bidding-on-ad-exchanges-is-challenged/ Digital media optimization news and discussion website. Wed, 17 Mar 2010 03:06:03 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Rob Leathern http://www.adexchanger.com/data-driven-thinking/beyond-the-hype-why-real-time-bidding-on-ad-exchanges-is-challenged/#comment-2784 Rob Leathern Tue, 27 Oct 2009 00:18:37 +0000 http://www.adexchanger.com/?p=9742#comment-2784 Excellent post, Pascal. Very good points about the coming evolution of the ad world that will still take a little while. Euphemism of the day: "the "AdWords-ish-ness" of DoubleClick's AdX 2.0 interface". Zach - I'm also very interested in seeing how the publisher participation angle plays out. As long as the exchanges can keep enough mindshare while they reach for the network effects Pascal mentions, waiting for larger numbers of advertisers, and exchanges can reduce the barriers to trial and to "heartbeat" - that is, to keep the light on and keep a set of tags live in whatever ad system they have - I'm hopeful we'll get to that exchange-driven future. The danger (for exchanges and networks too) is that the transactional costs of acquiring publishers, and having them plug into a system that is not quite ready yet don't sour them on the experience and make this transition take longer than it should. Some of these "switching cost" delays are going to be a big part of this transition but hopefully all the players in the space can minimize these. Excellent post, Pascal. Very good points about the coming evolution of the ad world that will still take a little while. Euphemism of the day: "the "AdWords-ish-ness" of DoubleClick's AdX 2.0 interface".

Zach - I'm also very interested in seeing how the publisher participation angle plays out. As long as the exchanges can keep enough mindshare while they reach for the network effects Pascal mentions, waiting for larger numbers of advertisers, and exchanges can reduce the barriers to trial and to "heartbeat" - that is, to keep the light on and keep a set of tags live in whatever ad system they have - I'm hopeful we'll get to that exchange-driven future.

The danger (for exchanges and networks too) is that the transactional costs of acquiring publishers, and having them plug into a system that is not quite ready yet don't sour them on the experience and make this transition take longer than it should. Some of these "switching cost" delays are going to be a big part of this transition but hopefully all the players in the space can minimize these.

]]> By: Zach Coelius http://www.adexchanger.com/data-driven-thinking/beyond-the-hype-why-real-time-bidding-on-ad-exchanges-is-challenged/#comment-2772 Zach Coelius Mon, 26 Oct 2009 20:43:31 +0000 http://www.adexchanger.com/?p=9742#comment-2772 Matthew, the inflection point all revolves around ecpm. As bidders on the exchanges get more efficient and better at reducing waste we can and will be able to pay more for the good impressions that we want. That will raise average ecpm for publishers who put their inventory on the exchanges. Once that ecpm grows to the point that it is higher then what ad networks can offer you will see a ton of publishers making their inventory available for bidding on the exchanges rather then giving it ad networks. You will see a huge tipping point for the exchanges when that happens. Matthew, the inflection point all revolves around ecpm. As bidders on the exchanges get more efficient and better at reducing waste we can and will be able to pay more for the good impressions that we want. That will raise average ecpm for publishers who put their inventory on the exchanges. Once that ecpm grows to the point that it is higher then what ad networks can offer you will see a ton of publishers making their inventory available for bidding on the exchanges rather then giving it ad networks. You will see a huge tipping point for the exchanges when that happens.

]]> By: Matthew Goldstein http://www.adexchanger.com/data-driven-thinking/beyond-the-hype-why-real-time-bidding-on-ad-exchanges-is-challenged/#comment-2753 Matthew Goldstein Mon, 26 Oct 2009 13:28:42 +0000 http://www.adexchanger.com/?p=9742#comment-2753 Pascal, great post. I totally agree with you that the ad networks are not dead -- though I do see some consolidation happening. As you said, those ad networks with a competitive technology advantage will succeed in their ability to use data to arbitrage the abundance of exchange inventory. My big question is what do the publishers end up doing as the ecosystem quickly changes? Will they continue to send all of their inventory to the ad networks or will the evolve with a new model? Pascal, great post.

I totally agree with you that the ad networks are not dead -- though I do see some consolidation happening. As you said, those ad networks with a competitive technology advantage will succeed in their ability to use data to arbitrage the abundance of exchange inventory.

My big question is what do the publishers end up doing as the ecosystem quickly changes? Will they continue to send all of their inventory to the ad networks or will the evolve with a new model?

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