How Important Is 'First Look' At Inventory?

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First LookAs data is appended to display media in real-time auctions, certain "old" ways of doing digital business may warrant a re-examination. AdExchanger.com thought "first look" might be one of those tactics that deserves review.

But before we begin, don't know what "first look" is? Into the weeds we go...

Let's say you're a publisher and you're selling your non-guaranteed, (remnant) display inventory through two buying partners: Ad Network A and Ad Network B. In a very basic, ad network "waterfall" setup, Ad Network A gets a chance to buy remnant display ad inventory first - this is "first look" - and then, if Ad Network A doesn't want it, it passes the request for an ad to Ad Network B.

And now imagine 2 or 3 ad networks, a private exchange and another open, ad exchange all in a publisher's "waterfall" of remnant, demand sources. You get the idea.

So... given the pace of innovation with digital audience buying and today's real-time bidding (RTB) environments, AdExchanger.com asked a selection of executives in the world of online advertising the following question:

"How important is 'first look'?"

Click below or continue scrolling:

Mario Diez, CEO, quadrantONE

"Buyers and their intermediaries all ask for first look - some sort of proprietary relationship with media owners that they can translate to their client as an enhanced value. It helps a network or agency buyer's conversation with a brand when the media entity can identify clear, differentiated value around 'first look,' for sure. But, as with all 'value-adds,' it all comes down to some sort of exclusivity - and trust between the parties. From the premium publisher side, first look is the 'carrot' that we are happy to provide based on an expressed exchange criteria. This can be a guaranteed spend, an overall spend, bid bias, above market rate pricing, etc... But, it has to be all-encompassing because just asking for first look is no different than a sales rep asking an agency 'can you send me an RFP?' Right now, agency trading desks are all asking for it because it enables them to show their clients value beyond the buying efficiency and centralized data strategy they already deliver. Ad networks have built years of intelligence on how frequency plays to performance and market that position in to agency buyers - not to mention marketing the value of 'above the less desirable inventory stack.' First Look is just another, different, seemingly more exclusive, bite at that apple."

Matthew Goldstein, EVP Operations, Korrelate

"From a publishers perspective I believe 'first look' may be the wrong way to look at this topic. If publishers had a single, unified waterfall and the publisher knew the value of each impression then the publisher could determine what to do with the impression and alleviate the need to give first look to a 3rd party. Meaning, a publisher will need to know that a BlueKai/eXelate auto intender at 5:00 AM on above-the-fold inventory is worth a CPM of $5.50 on the exchange and a non-cookied user at 9:00 PM on below-the-fold inventory is only worth $.75 on the exchange. If the publisher had this knowledge, then the publisher can make the best decision with all the available information. I believe publishers will have these types of tools in the next 6-12 months and will start to use the data to make the most informed decisions. Until then, a publisher has to be very careful with giving a 3rd party first look and the publisher has to trust the 3rd party and be fairly compensated for the impression.

From a marketer’s perspective, advertisers and agencies always want first look however that value can be diminished if a publisher sells a ROS ad to Dodge and Chevy buys first look on the remnant side, then both direct and non-direct advertisers are not receiving optimal value."

Jay Friedman, COO of Goodway Group

"At first, 'first look' would appear to be the very most important aspect of acquiring inventory and its associated audience. While it’s true that getting a 'look' earlier on in the bidding process than others will often help someone acquire better inventory, it can actually go both ways. With the proliferation of data segment discovery tools like Genome and AMP it’s now possible to 'buy around' your target data segments. For example an auto manufacturer may find that their converting shoppers also index strong against those who have searched for 'pet cats' related items. In this case, first look at an auto shopper may not be as important if the buyer is targeting a similar but unrelated segment. On the flip side, where first look is creating a revolution in the industry is that the older model ad networks who buy in bulk and direct from the publisher are essentially guaranteed not to get first look. Studies show how RTB has increased revenue on a per impression basis for publishers and publishers are now quickly putting RTB-enabled ad calls ahead of anything they know is a fixed purchase at a low price. In this case, those bidding through RTB will consistently give earlier – or earliest – looks, something that is very important when most data segments still have to be bought head on."

Vlad Stesin, Co-founder and Vice-President, Product, BLOOM Digital Platform

"This concept may seem obsolete at first given the adoption of RTB (everyone sees the impression and whoever wins the auction gets it), but the basic dynamics haven't changed in years. Whoever is taking the very first look at the impression, namely whoever is first party, has incredible strategic control. That is the real reason why all major ad serving companies have been gobbled up over the past little while.

If you are first to see an impression, you can better judge its value and can decide to put it to better use. The concept of information asymmetry, where one party may have information on the impression that another does not, reinforces the importance of seeing first. Obviously being first also opens up more opportunities for arbitrage - or even connecting arbitreurs from both sides. Echoing a major theme in Jerry Neumann's recent post and its emphasis of fuzziness of quality in our industry, being first party ultimately allows you to define what quality inventory really means to you without relying on others. And it's not something you can do with confidence if all you get is not the full picture but arbitrary fragments of it."

Martin Kelly, Co-founder, Infectious Media

"I get the concept, but I think that's all it is at the moment. We all need to walk before we can run and that involves every party on the demand and supply side getting a proper understanding of real time bidding, what it is, the benefits and also the drawbacks. 'First look' is an interesting idea from a buyers perspective to gain some kind of advantage but any publisher that thinks about promising this needs to be careful, surely the whole point of RTB is to sell your space to the highest bidder and if they aren't in your 'first look' pool then that's a problem. The demand side of display is very fragmented between data companies, ad networks, agencies and advertisers so there is not the kind of aggregation of demand that you see in something like TV that could make something like this feasible or attractive to a publisher when private exchange arrangements will give many of the benefits without the drawbacks."

Adrian Tompsett, Director of Business Development, DataXu

"The answer to this question ultimately boils down to how much you have to pay for that highly coveted, invite-only, shiny first look. And if you're a skeptic like me, you need to be cognizant of what you're buying and how that 'first look' is actually defined – as the first impression on a premium publisher's site or on an exchange or what? The theory goes that right of first refusal deals allow buyers to shop in a proverbial fully-stocked store, not pick through the bins at a yard sale where you just might get a great deal on a shirt that doesn’t fit quite right. However, the reality is that every impression has some value – be it the first impression or the thousandth. The real value comes from impression-level decisioning across the entire media plan. Taking a holistic approach allows smart marketers to increase global media effectiveness and operational efficiencies by blending the best 'pieces' from across the media spectrum to achieve the best 'look' possible with a given budget."

By John Ebbert

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5 Responses to “How Important Is 'First Look' At Inventory?”


  1. Joe Doran says:

    Matthew Goldstein is right on. First Look was really really important 3-5 years ago but with the technology available today and within 6 months, it should not be needed. Wishful thinking? I don't know but if I was a publisher, I wouldn't want a marketing vendor to have the ability to "try the milk for free" because they will never buy the cow!

  2. Jeremy says:

    I think Jay Friedman's assessment overlooks the obvious. What's to stop a network from having the following exchange (no pun intended) with a publisher?

    Network: what's the yield you are getting through the RTB exchanges?

    Pub: $1.00 eCPM

    Network: We will give $1.01 CPM. How much will you sell us before putting it up for bid in the exchanges?

    Pub: As much as you want to buy

  3. Martin is right. It sounds like a really interesting approach but then you start to think about it.

    - Who do you choose to give it to?
    - How long for?
    - Is it on the back of a commitment (not really the spirit of exchanges)
    - Is it with a high floor (fine but maybe very little inventory will be bought)
    - Is it to an agency or to a client?

    In 2001 I bought every single insurance keyword for a big UK bank for both of Google's sponsored listings or to you and me the top two paid slots on Google for one year - how much did I pay? About £1m!! It was good at the time for Google and us but it did not take long for Google to realise that they could make far more money if they went through that bidding process on every word all day long..First look has a wiff of that, a way to get money but in the long run, I suspect a full on auction for every impression to the whole market is more likely with some type of private exchange alongside.

    @m_bertozzi comment here.

  4. Jed Nahum says:

    In theory, first look becomes unnecessary in the exchange world. In practice, the marquee value of being the first in line may be attractive for both the buy and sells sides in certain cases.

    I could see private exchanges evolving in the direction of a first look business, at least for some time. Imagine a publisher has a premium business (i.e., first channel). A trading desk approaches them for a PVTX. This may enable the publisher can create a new business between their first and second channels (premium and discretionary, whatever). This channel could be characterized by greater transparency, higher floors, and inventory potentially excluded from the standard exchange/network business. In fact, publishers could use this channel to sell data to trusted partners, while making it unavailable in the broader exchange. This might be an interesting implementation of first look.

    Agencies might be interested in this business because they can show their advertisers more premium and exclusive inventory. Additionally, the inventory can be procured using their existing platforms which would have the effect of enriching their data store. That data and frequency information can be reutilized later.

    Publishers might be interested because they can create a new tier in their yield management that creates more value for both themselves and their partners. And the automated buying that would take place could create welcome pressure on selling costs in the first channel. The management of pricing (floors) would be critical to making this type of strategy work for a publisher.

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