Please Stop Calling It ‘Currency’

amihaiulmanddtData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Amihai Ulman, founder and chief operating officer at Mass Exchange.

Every couple of years, the industry develops an infatuation with a new topic. Today’s infatuation: describing the current media trading landscape using financial terms.

I believe, however, that media trading needs its own vernacular for value. If the industry can come up with grades of viewability, attention and performance, we will be much closer to “currency.”

Currency is the agreed-upon “ruler” for measuring price. If publishers offered inventory for sale tagged with a grade A viewability, for example, which may guarantee a 90% viewability rate, then currency is the right term. If all buyers and sellers have agreed-upon grades and definitions for attention, viewability or performance that are part of the contract, we have currency.

Now that a majority of the piping infrastructure is built and represents a viable and profitable sector of the industry, the focus of the conversation has shifted to value. It doesn’t matter what an impression is worth in the market if you can’t bid on it and serve an ad to it in real time. Now that marketers can buy both guaranteed and non-guaranteed impressions in real time or on an IO, the conversation is understandably shifting to whether they are buying the best-performing inventory they can.

Adopting Financial Vernacular

Since the conversation about value is much younger, many have opted to borrow a vernacular from finance. The problem is that most words and concepts in finance were created for finance, not media. So when financial terms are applied to media, people assume that the concept or term from finance means the same thing in media. In reality, the concept in media is usually close but not exactly like its financial counterpart.

Take, for example, the term “exchange.” In media, the word is used to describe technology more akin to a telephone exchange, which can be mapped by a graph, rather than a stock exchange, which is mapped by hypergraph. While both concepts use the word exchange, each uses the word very differently.

In a telephone exchange, every message contains its own destination, making it a one-to-one connection between the caller and person being called. In a stock exchange, the exchange determines the destination, creating many-to-many connections between every buy-to-sell order and sell-to-buy order.

An ad exchange falls somewhere between the two, but is much closer to the telephone exchange than the stock exchange. That’s because today’s ad exchanges manage one-to-one transactions via programmatic direct – but not many-to-many transactions – along with one-to-many connections in the form of real-time bidding and private marketplaces.

Misused Concept Du Jour

The current concept being misused is currency. People refer to audience data as currency, performance as currency, attention as currency and viewability as currency, just to name a few mischaracterizations. In these cases, the concept that should be used is “standardization,” even though that may raise long-standing fears of industry commoditization.

There’s a better way to think about currency. Currency measures price, not value. Media performance does not tell you what to pay, it tells you how well one line item performed compared to another. It measures relative value. The same goes for viewability, audience data, attention and the like.

If we looked for “currency” in financial markets in the same way that many media folks use the term, we would find standardized units of value. In coffee trading, for example, the “currency” would be the number of pounds, delivery date or deliverable grade P, 1, 2, 3 and 4.

Without standard definitions and value for such things as viewability, attention or performance, none can be considered a currency. But we are close, very close.

I sometimes read industry commentary lamenting that there are differences between ad markets and financial markets. Media exchanges just don’t work the same way. Without “currency,” deals are much more complex. Here’s the term we really need: standards.

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