Reach Machines » Ad Exchanges Are the Ad Networks of Tomorrow

April 23, 2008

Ad Exchanges Are the Ad Networks of Tomorrow

Filed under: media planning, technology — Tags: technology advertising media-planning — bstraley @ 1:41 am

I read this article from Monday’s NYT with great interest. It describes the problem that we’re solving at Reach Machines. Advertisers are realizing the blunt instrument of the portal buy is inefficient and are increasingly turning to more nuanced and complex media plans to deliver the kinds of returns their customers demand. Today, the best method for managing more complex campaigns is to lean on advertising networks to shoulder the administrative load for buying, placing, and tracking ads across relevant sites. They also do the work of finding clusters of sites in particular verticals that offer the content and context the advertiser is seeking with which to engage with her audience.

While this is certainly a step in the right direction, we believe that as online advertising becomes more standards-based and a small number of ad serving platforms establish dominance, the need for ad networks as they currently exist will diminish. Why be limited by a network to a choice of a few hundred sites (if that) across the entire Web, when there are potentially thousands of highly relevant and potentially productive sites on which to advertise?

In the place of today’s ad networks will be more or less open exchanges that allow publishers and advertisers to buy and sell online advertising inventory in a much more efficient and transparent way than what is currently possible today. There is too much opacity and inefficiency in the online ad market that is in so many areas technologically sophisticated and performance oriented for this outcome to not be realized. This trend is starting to accelerate as evidenced by the emergence and subsequent acquisition of online ad exchanges (see Doubleclick, RightMedia, AdECN, etc.).

What’s inhibiting the emergence of the exchange model is the lack of metrics, tools, and capabilities that both publishers and advertisers need to value and manage spend through these marketplaces. Metrics are required to value advertising inventory on an advertiser-by-advertiser basis, the tools need to be in place to track and monitor fluctuations in value and available inventory over time, and organizational capabilities need to be developed to manage the information, analysis, and transactions that make such a system work.

While not solely focused on the exchange model of online advertising buying, we’re building Reach Machines out of the belief that flexibility, transparency, openness, and standards are good for the online advertising industry. While ad networks represent progress (in some cases), marketers will demand more and more online advertising solutions that help them find online advertising opportunities wherever they exist on the Web and enable marketers to pursue them. Ad exchanges combined with open ad serving platforms and next generation planning and buying tools will enable online marketers and agencies to do just that.

Close this Window Bookmark and Share This Page

Save to Browser Favorites / Bookmarks