Google Ad Exchange Director Reese Talks Exchange Data, Publisher Tools

DoubleClick Ad spoke to Google’s Lexi Reese, director, DoubleClick Ad Exchange, about the whitepaper (PDF) which offers insights about publishers using Google’s DoubleClick Ad Exchange within the past year.  (Google’s Neal Mohan formally announced the whitepaper on the Google blog here. Interview with Mohan by PaidContent’s David Kaplan is here.)  Also, Reese discussed new category blocking tools and private ad slots for publishers available through the Exchange.

The key finding in the paper, according to Google, is that when DoubleClick Ad Exchange wins the auction in the publishers’ ad servers, publishers make 188% more revenue compared to “fixed upfront pre-negotiated sales of non-guaranteed inventory.”

Reese said that part of what’s driving the revenue is the increase in data-driven buying with 60% of ad exchange buying real-time bidding-enabled, which translates into a tripling of RTB’d inventory.

Unsurprisingly, Google remains very positive about the impact on a publisher’s P&L with the Ad Exchange. How does the increase in real-time buying translate in terms of number of impressions per day?

LR: We’re still not talking about the actual number of impressions or dollar figures but we have 100s of publishers and 1000s of buyers including AdSense. The growth is coming from both the number of buyers and sellers on the Exchange and the amount of inventory being transacted.

Can you speak to CPMs and how CPMs are trending from the last study (PDF)?

You can presume that, generally, if revenue is going up, CPMs are going up. I don’t have an apples-to-apples to the last study.

The methodology of how we conducted the research is important. Since the middle of last year we have been recording what would the impressions have sold at if the exchange had not won the auction. Also, it’s important to note that Google’s economist, Hal Varian, has been involved in the study and vetted it over the course of the last several months.

The phrase in the whitepaper about “fixed upfront pre-negotiated sales of non-guaranteed inventory” seems like an oxymoron. What does that mean?

It includes any impression for which the exchange is allowed to compete. So anything that is booked at a priority level equal to or lower than the exchange in a publisher’s ad server directly would be included in the study such as directly booked ad network deals, if you’re working with a third-party to manage your inventory, [and so on]. As long as they were at or lower than the priority level of DoubleClick Ad Exchange, they were included in the study.

Can you talk about the increased number of categories that can now be blocked through the DoubleClick Ad Exchange?

Premium publishers have a lot of business rules. We needed to refine our category targeting so publishers could feel secure about the advertisements that appear on their sites. You can expect over the next several months more tools for publishers so they take can take control of ads on their sites.

Can you envision a day when publishers will be able to set CPMs across the contextual categories you offer them?

I can envision a day when we have finally ticked off every way a publisher wants to surface inventory on the Exchange and we are prioritizing those needs according to the ones publisher want most.  That’s definitely one that’s been mentioned. I’m not sure it’s the highest priority, but we want to hear what is most important to publishers, so please feel free to comment on this post.

Why the need for the browser toolbar for publishers?

We want to do as much proactively for publishers so they only see ads they want to see on their site. With so much demand coming through our system, we also want to be smart about people getting tools that allow them to take ads off their site as quickly as possible. This is somcthing that publishers had been asking for.

Regarding private ad slots, this is a product that is reminiscent of the private exchange idea that is proliferating right now. Is that an appropriate analogy?

I think it’s an apt analogy in that [private ad slots] enable publishers to offer their inventory in a way that they feel most comfortable with. For example, it can be a certain category of advertisers, or advertisers that they want to white-list -that’s what the private ad slot enables them to do.

By John Ebbert

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1 Comment

  1. The key finding – ‘with Adx….publishers make 188% more revenue compared to “fixed upfront pre-negotiated sales of non-guaranteed inventory.’ Is this really a key finding? When a publisher uses DFP and prioritizes ad at or below AdX (DFP prioritizes numerically from 8 (highest priority) to 15 (lowest priority)), AdX generates a higher yield. Isn’t this like announcing 3 is a bigger number than 2? Of course, a higher priority will generate a higher yield. That’s what’s supposed to happen.