Stephanie Clifford writes about ad exchanges in the New York Times and discusses the new “traders” that are using exchanges to buy and sell ads.
First, it’s great anytime the ad exchange space gets press in my opinion as it’s still not widely understood both in the business world overall and even in the advertising space. There are a few comments I’d like to make though:
– It’s absolutely correct that there is a set of companies that are spending a lot of time, effort, and money around learning how to trade on exchanges. This is a very smart move on their part. Exchanges are still in the very early stages, and it’s inevitable that they are going to grow over time as the biggest players (Yahoo!, Google, Microsoft, AOL) continue to invest more in them.
It would have been cool to get some more specific examples of the different ways companies are using exchanges, although I doubt the general public would understand it much.
– Exchanges may be primarily remnant inventory today, but they are quickly going to be in the guaranteed inventory world, and that will create even more value and opportunity for everyone.
– As Greg Yardley points out, the actual serving of the ad is not the most important piece of what’s going on. It’s doing the ad arbitration and how much revenue the exchange touches that really matters.
– A lot of people make comparisons to the financial industry and the trading that occurs on the financial exchanges. While there are some similarities, it’s really quite different. And we’re a long way off if ever from really getting to that point, but that also doesn’t really matter. This doesn’t need to be exactly like the financial trading world, it just has to make advertising better and create market opportunities at scale.
In an upcoming post I’m going to dive into why ad exchanges are so crucial to the future of display advertising. It should be fun, if you care about this sort of thing.