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.

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.

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.

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!

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.”

Marketplace Select starts with the Publisher or ad network who creates a site list for an “exchange buyer.” In turn, the buyer or advertiser selects from the list which sites they want their campaign to run on. Presumably, this will speak to branding ad buyers who are concerned about showing up within inappropriate content such as the example with OnlyFights.com.

It would appear that Right Media Exchange has relied on geo-targeting for its UK clients, to date. What they are now realizing is the importance of a brand-safe environment beyond the needs of scale and reach for performance driven campaigns.

In some ways, Right Media’s development of Marketplace Select can be seen as good news as the exchange makes baby steps toward becoming an exchange for remnant AND premium inventory rather than just remnant. Brand dollars typically stay away from remnant inventory and their adoption of the exchange model will be a key driver in the future.

It’s unclear whether Marketplace Select will be available for U.S. or other international buyers and sellers - or whether it will be available in the new Yahoo! APT platform.

No doubt the timing of running the press release the day after the U.S. Thanksgiving holiday hopes to split the difference between mollifying UK advertisers and worrying U.S. advertisers.

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:

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.

An article in today’s AdWeek offers further differentiation: “Barrett said AdMeld differs from those in its focus on the top 150 publishers. Its beta clients included The Huffington Post and WorldNow, a collection of local media sites.” In regards to yield optimization for web publishers, Barrrett told AdWeek, “It’s a terrific pain point and it’s not going away. It appears there’s less sold inventory. It’s not a problem that’s going to solve itself anytime soon.”

Also, according to Paid Content, AdMeld also completed its Series A round of funding - coming in at a healthy $7 million. Investors include Spark Capital and The Foundry Group.

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.

To date, AdECN has been using the Microsoft ad network as a test bed meaning: “Microsoft’s owned and operated ad network properties including the MSNDR network and Content AdsBeta, Microsoft’s contextual advertising offering.”

Pricing for the new service is transactional and we would presume that this means a transaction equals one ad impression served - a buying and selling ad network agree to a single, display ad placement.

AdECN has stepped into the public eye with this announcement after a long silence. Hopefully, it hasn’t stepped into something else.

Does the new platform work? Is it another Microsoft swing-and-miss in the online advertising space?
We’ll see.

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.

Clearly, Display is not Search. Search advertising is about reaching the user at a clear moment of intent. Display is about creating interest that may not be there to begin with and then driving it to a moment of intent and interest that may ultimately involve Search.

It’s amazing to us how often writers for top mainstream advertising publications can get online advertising tactics and strategy so wrong. It goes to show, once again, how early we are in online advertising, too. More savvy reporting will occur when there’s more skin (revenues) in the online advertising game - and that’s just a matter of time. In this article’s case, it appears that the MySpace self-serve example provided a compelling but unwittingly biased “hook” for the writer. MySpace needs to make revs - why wouldn’t they say that their new DIY (do-it-yourself) tool will be the answer?

It also appears from the AdWeek article that local advertisers are the key to self-serve - just let people geo-target with a DIY display self-serve platform and that oughta do it. It will help some advertisers, pubs and ad technology companies (AdReady appears to be well-positioned), but if you’re a little advertiser, you still need ROI and that’s a tough slog without robust analytics. Self-serve and its users demand direct response (DR) results. A branding campaign is likely not an option.

One other note: Google’s AdSense network has been running text ad display for years. Text as display is effective partially because graphical is intuitively seen by the user as an ad and text less so.

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:

How is APT from Yahoo! different from the Right Media Exchange?

APT from Yahoo! will leverage the systems of the largest internet publisher, the first and largest exchange marketplace and the leading online video platform, as well as the combined experience of the teams that built them.

APT from Yahoo! is a new platform that expands on the principles of the Right Media Exchange (RMX) open ecosystem, combining the concepts and functionality of RMX with Yahoo!’s ad network. It is a more comprehensive ad management platform with regard to guaranteed inventory, support for rich media, support for targeting, and ad inventory quality controls. While it is a separate exchange, there are future plans to link the two exchanges together.

Through APT from Yahoo!, customers will have the ability to buy and sell premium, guaranteed, and non-guaranteed inventory. Businesses can use APT from Yahoo! as an end-to-end solution, or as a supplement to existing solutions. Clients can access Yahoo! and other exchange members’ behavioral targeting, contextual targeting, and standardized systems of ad classification.

Shields focuses his article on Yahoo! returning to what it does best in his opinion: building content: “To me, it’s clear Yahoo knows how to launch and program the hell out of content sites, which major brands love.”

Until RMX fully integrates into APT (and its given some time “cook”), it’s too early to say it’s over for Yahoo!’s advertising platform ambitions. But, his point on Yahoo!’s content creation abilities is spot on.

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.

From the notes on the call with Morrison and Coolbrith, Addante provided insight on current CPMs in remnant display and, happily, the news was good with caveats - and in the face of negative online advertising analyst predictions.

Addante said that Q2 eCPMs increased 7% year over year and added that Advertising.com and ValueClick continue to perform well. In particular, ValueClick, which ThinkPanmure covers, has apparently become creative in its offerings to advertisers and consquently publishers are seeing the benefits - i.e. behavioral targeting, vertical networks, new technology, etc. Given the flood of remnant display out there, the eCPM increase sounds good to us.

On the exchange front, the opinion from Addante was that advertising exchanges (Right Media and DoubleClick AdX were mentioned) are not having a significant impact yet on the “yield management paradigm.” Addante offered two primary challenges for the ad exchange model:

1) failure as a pricing mechanism due to sizable demand/supply mismatch in current exchange incarnations, and 2) established ad networks continue to balk at the radical changes to their business models and operating procedures that would be required to work with ad exchanges, thus, limiting the pool of demand available to the exchanges (and contributing to the demand/supply mismatch).

We take #1 as a liquidity issue that will be overcome in time. We’re curious about how the auction-based, dynamic model of exchanges works with yield management tools of companies like Rubicon Project - especially given the dynamic nature of the exchanges where bid/offer pricing is constantly changing.

Also of note was Addante saying that RightMedia was having latency issues as has been reported.

And finally, we enjoyed this summary from Addante: what do publishers want from their ad network and exchange relationships? Addante says:

1. Ad quality
2. Latency/network performance
3. Revenue

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?

Right Media and Yahoo! are not blind to contextual as one piece of the puzzle and we anticipate an announcement that clearly offers this solution in the future.

Yahoo!’s press release offers a few more details on the new platform’s capabilities including behavioral and geo-targeting:

* Guaranteed cross-selling with pre-defined selling rules
* Ad Exchange for non-guaranteed inventory
* Advanced audience targeting techniques based upon behavior and geography
* Inventory lookup and forecasting across individual and partner sites
* Creative workflow automation and personalization
* Powerful rate card tools for improved yield management
* Filters for better controls around creatives
* Flexible and powerful APIs
* Federated ad call to support multiple ad formats”

It’s great to see Right Media rattling the ad exchange saber, if you will, with the announcement. We wonder where Google and DoubleClick are. Asleep at the wheel, or lying in the weeds waiting to jump?

Also, we wonder if the current Right Media Exchange, DMX, etc., gets officially wrapped up in APT at some point. This isn’t clear to us but we’d guess so.

To visit the Yahoo!s new APT website, click here.

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.

DR marketers will be happy to try and get a crack at the huge audience. But, the target audience may need to scroll down below the fold to see the ad.

Hopefully, the exchange model’s transparency overcomes the remnant concerns for brand and DR advertisers.

David Kaplan at Paid Content provides the most in-depth overview of BidPlace in his interview with Lynda Clarizio, Platform-A’s president, and Eric Bosco, Platform-A’s chief product and U.S. operations officer.

Bosco is quoted as saying the following regarding the “big difference” between BidPlace and other exchanges:

“The thing that I feel really differentiates our offering from what others are going to have in the marketplace is that we’re actually exposing all the power of AdLearn optimizer. For example, if you’re running a CPA campaign, with a simple set of tags you could have AdLearn discover the best places on our network to place your media and meet your ROI without having to compute all those individually.”

While it’s true that no one else has the AdLearn optimizer, most ad exchange and networks have an optimizer of some sort that allows budget to be spent across a range of placements and then optimized according to the best or target performance.

One other quote points to our continuing call for a cross-campaign analytics tool along the lines of proposed Microsoft’s proposed engagement mapping which was released to Atlas customers in beta form, yesterday.

“Clarizio: “I don’t agree that branding is not viable online, that you can’t adequately measure it and that there’s not a lot of demand from the advertising community.”

At the very least, tying display to search marketing success - whether organic or paid - would help the brand guys show the benefit of branding online.

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.

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.”

If ad exchanges want the premium opportunity (brand dollars), they are going to have be less DR-focused in their sell and maybe less about technology. Yes, we know - technology is what enables the opportunity. It’s a tough one. But, the publisher inventory on exchanges, for now, is remnant. So, show us the “premium,” ad exchanges!

Ideas!

Ad exchanges need a few, easy-to-understand case studies where a couple of known publishers out there who have a premium spot on their home page that they can’t sell, make it available on the exchanges and sell it for a decent rate.

Another idea: certain publishers commit to a year of selling premium space thereby building the market for premium and ultimately outperforming their direct sales from a bottom line perspective. (Perhaps exchanges offer certain minimum guarantees initially.)

It would assist in bringing a flood of new inventory from all web publishers, and help the brand advertiser buy off on the brand-safe, premium opportunity of the exchanges.

Eventually, all of this will happen - we’re talking about jump-starting online media buying of premium inventory through 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?

Bartender I’ll have one impression on CNET for 2 cents, three impressions on WSJ.com for 3 cents, and put my next margarita in a to-go cup.

The AdECN quote is reminiscent of the New York Times attempt at explaining the exchange model and the iinherent tactics for advertisers and pubishers in a July 2008 article. Times writer, Stephanie Clifford wrote, “The major appeal of exchanges is that with some analysis, advertisers can buy ads one by one, and track the performance of each ad.”

Hey, nobody buys per impression! They buy bundles or blocks - exchange style. Yes, bids can be can be changed on the fly using technology, but we’re not so sure the idea of “per impression” optimization makes the exchange model sound scalable.

Not surprisingly, at various points in the article, exchanges were able to stuff in the “brand” word as part of their ongoing drive to present exchanges as a premium opportunity.

Wegert’s final words challenge the “remnant” moniker given to exchanges to-date: “It’s time for us to propel things even further forward by exchanging our old media standbys for new opportunities and our misgivings for exchange-based campaigns.”

OK, exchanges… time to put this on your press page.

“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.

“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.”

A bleak outlook, to be sure. We’ve already seen predictions of a slowdown in online display advertising.

Morrison predicts that among industry verticals to likely suffer the most initially is the auto vertical followed by finance and travel. In addition, he notes that GM’s recent advertising budget cuts will affect both online and offline properties - it was previously thought that online would not be affected but his team is finding the impact being felt by publishers online to the tune of a 30% reduction in spending compared to the first half of 2008.

AOL’s announcement last week that it was being impacted in finance, travel and auto verticals is further proof of a deterioration in spending according to Morrison. Among public companies whose business is primarily online, he sees Yahoo! followed by Google, TheStreet.com and BankRate as the most affected by the recession.

In our opinion, with the ad exchange model’s ability to squeeze the last penny out of a publisher’s inventory through the open auction, the “media recession” may prove to be an important next phase in proving the ad exchange’s value to advertisers and publishers.

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.”

In other words, Blue Kai is creating an open exchange for the cookie data that, for example, the formerly-independent, behavioral ad network Tacoda (started by Dave Morgan and bought by AOL in 2007) used to buy on the cheap from its publishers. An exciting idea to be sure.

In the old (current AOL?) model, Tacoda offered publishers two ways to increase inventory yield:

1. Deliver Tacoda advertiser campaigns on the publisher websites through standard, IAB ad sizes.
2. Provide cookie data to Tacoda by putting Tacoda javascript on all publisher web pages which, in turn, sent Tacoda behavioral data and allowed them to create user profiles for targeting purposes.

Publishers made significantly more by delivering ads as opposed to setting cookies.

Considering the value of the cookies to Tacoda as the backbone of their behavioral business, one might think that Tacoda was getting a great deal.

Yes and no.

Cookie data is very valuable, but Tacoda was able to pay higher CPMs than other ad networks since the cookie data provided improved and compelling targeting capabilities for advertisers.

Blue Kai’s model puts the power to monetize and control the anonymous cookie data into the hands of the publisher. BlueKai gets a percentage of each transaction. Its exchange will probably drive privacy advocates nuts, but, according to the article, since its anonymous data, it should override privacy concerns.

The BlueKai home page already illustrates their goals for the new marketplace: “A harmonious equation where effective and profitable marketing becomes a polite answer to a consumer need.” Yes, Senator.. our cookie-ing is polite.

We jest. The behavioral data trove available online appears to be an excellent fit for the efficiencies of the exchange model.

In the article, it is noted that Tawakol believes BlueKai “is the first ad exchange focused on so-called intent data, meaning that people have demonstrated an explicit interest in buying a product or service.” It is suggested that BlueKai gives the same opportunity to advertisers as search - we think this is a bold stretch.

If the search comparison were true, one could say that about another way advertisers can leverage intent/behavioral data through an exchange: by using contextual data with retargeting (poor man’s behavioral without a robust profile).

For example, user reads new car article on the WSJ.com; exchange registers page as being in the “autos” category and the user is cookied accordingly; thereafter, whenever the user visits any page on the ad exchange, the user can be targeted again by advertisers interested in users who read auto content and presumably are interested in new cars.

But, contextual display advertising does not equal search for intent, either. Search is the bottom of the funnel. Everything else creates the interest.

As we’ve argued before, a robust analytics package is needed for ad exchanges which tracks from display campaigns straight through to search. The analytics would show how display advertising positively influences the purest moment of intent which is exhibited in search and thereby justify display campaigns as an important tactic along with search.

Regardless, BlueKai is opening up an exciting new revenue stream for publishers, better targeting for advertisers and more useful ads for the consumer.

The exchange model wins again. Read the entire CNET article here.

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.

A data pull in the article includes more work from Bill Morrison and his team at ThinkPanmure (whose chairman just departed). Wegert writes:

“While their (ad exchanges) role within our industry is still relatively small, their potential is huge. According to data from economic research firm ThinkPanmure, about 15 percent of all remnant ad inventory and 5 percent of all online display advertising were sold through exchanges in 2007.”

Considering the nascent stage of ad exchanges and the lack of awareness in the marketplace, 5% for all online display is an impressive figure.

And, best of all from Wegert, she promises an article next week on some of the key players: likely Google’s DoubleClick, Yahoo!’s Right Media Exchange, etal.

To read her entire article, click here.