This is your second of seven free items this month.

To register, get added benefits and unlimited access to articles, Become a Member. Already a Member? Sign in.

Ad Network & Exchange Guide 2009

Why Ad Exchanges Are Picking Up Steam Again

Finally, Yahoo's Right Media, Google's Doubleclick and Even Some Small Indies Get Set to Shake Up Market

By Published on . 3

NEW YORK (AdAge.com) -- Remember two years ago, when ad-exchange mergers and acquisitions were all the rage? Yahoo picked up RightMedia, Microsoft bought AdECN and Google was busy swallowing DoubleClick, which was in the midst of launching its own exchange.

Things have been relatively quiet on the exchange front since then. They've had an effect on the market, but not the revolutionary impact some had touted.

But now, the leading exchanges as well as some smaller independents are readying new capabilities that promise to shake up the market once again and, in the process, begin to fulfill the promise that display exchanges first hinted at.

For starters, consider Yahoo's Right Media. While the exchange doesn't disclose numbers anymore, it claims a solid increase in transactions and dollars flowing through its platform since the Yahoo acquisition. But its real focus these days is on "What does the next generation of the exchange look like?" said Michael Walrath, Yahoo senior VP and Right Media founder.

For Yahoo, a lot of the attention is on its ad platform, Apt, which is focused on bringing the efficiencies of an exchange to premium, rather than remnant, inventory. Apt initially includes impressions from Yahoo properties and 130-plus newspaper partners. "There hasn't been an exchange applied to the premium upfront market up to this point," Mr. Walrath said. "Right Media Exchange is about real-time, spot market auctions of non-premium inventory. The underpinnings of Apt are the same -- it's still auction-based -- but it enables futures contracts or upfront media."

Premium inventory
While Right Media and Apt are separate platforms, Yahoo eventually plans to bring the two together, offering tools and capabilities for advertisers to buy from both platforms through a single interface, Mr. Walrath said. That will make it easier not just for advertisers but also for publishers. Yahoo has already found this useful in learning how to best price premium and non-premium impressions, Mr. Walrath said. While some publishers might be threatened by moving their best, highest-priced inventory into an exchange environment, Mr. Walrath said publishers can retain control over what inventory goes on the exchange, how it is priced and even who gets to bid on it. He said Yahoo is putting its money where its mouth is by adding its own display inventory into the mix. "No one has more to lose if premium inventory is commoditized than Yahoo does," he said. "That can help put a lot of questions and fears to the side."

Google, meanwhile, is making steady, if under-the-radar, progress with its ad exchange. AdSense search advertising still gets all the glory for being the company's money mint, but display -- and display sold via its exchange -- remains an important long-term direction. To that end, Google has chosen not to make big launch splashes with its exchange, but rather to "chip away at our vision one quarter at a time," said Neal Mohan, director-product Management for AdSense and DoubleClick at Google.

That includes continuing to improve the integration of the DoubleClick Ad Exchange into its core Dart ad-serving platform; moving toward integrating of display and text-based search advertising (and also different ad types, including mobile and video); allowing advertisers to purchase retargeting data; and improving on real-time, dynamic ad allocation, Mr. Mohan said.

Microsoft is concentrated on the next version of its AdECN exchange, with a focus on real-time integration with other players, including publication brokers such as Pubmatic on the publisher side, and emerging demand-side agency networks. In that scenario, ad requests are made, bid upon and served in real time with dozens of ad networks, brokers and publishers in the mix. That compares with more static buys today, even on exchanges, where everyone places bids far in advance of actual display. "This is going to require an evolution," said Jeff Green, director-product marketing at Microsoft's AdECN, adding that Microsoft is using the real-time capability for its own impressions and will release it more broadly later this year. "Ad networks and publishers are going to need to adapt to real-time bidding to compete in this constantly fluid world."

Read These Next

Comments (3)