Real-time buying and selling of ads through automated Nasdaq-like exchanges are the rage in online display advertising. So it would make sense that the same trend would take hold in video advertising, right? Well, no, partly because the formats themselves aren't standardized and sites use a complex array of different technologies to attach ads to video.
But that could soon change. BrightRoll, one of the biggest video ad networks in the world (third in reach behind Hulu and Tremor Media, per ComScore), has built a technology platform to create an automated market for buyers and sellers of video ads, much like a great many display ads are bought and sold today.
The company has been building the system over the past several months and is taking the service, BrightRoll Exchange, live on Wednesday. "A huge part of the value we bring to our buyers is we've found a way to get a lot of non-standard inventory into a standard platform," said CEO Tod Sacerdoti.
Display ad networks have been repositioning themselves as exchanges, or what are called "demand-side platforms," as advertisers move toward buying audiences rather than ad inventory specific to certain websites. Because networks have no unique access to inventory, and many don't have unique technology, they're simply moving where the market is going.
The same hasn't yet happened to online video advertising, but Mr. Sacerdoti believes it will, and soon. "The dynamics are changing toward automation. If we do not win the automation, we will have to compete with some other platform at scale that does the same thing," he said.
BrightRoll's video exchange will trade pre-roll advertising, just as its network is focused on pre-roll. The exchange will accept ads that start automatically, as well as interstitial ads that play when a web site is loaded or when moused over, but those will singled out as different units from standard pre-roll ads.
BrightRoll isn't the first to build an exchange for video; Adap.tv rolled out its own service in February with Gannet, Omnicom and Publicis committing dollars to the platform. The two buyers committed to using BrightRoll's platform include Cadreon, IPG's ad network and Media6, a startup that targets ads through online social connections.
Mr. Sacerdoti stressed that this doesn't mean BrightRoll is giving up on its ad network, which is humming along and profitable. "It's the majority of our revenue today and that's not changing," he said.
You won't see premium video inventory in BrightRoll's exchange like, say, network TV. What you will see is the vast and growing world of video native to the web. BrightRoll conducted its own survey that found about 20% of this inventory sits unsold at any given time. "There is a huge increase in the number of video dollars going to large free content companies that are not necessarily premium broadcast TV providers," Mr. Sacerdoti said.
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Michael Learmonth is digital lead at Advertising Age. Yes, he's on Twitter at http://www.twitter.com/learmonth.