As reported in iMedia Connection on April 4th, “Buyers and sellers of online display advertising will have a new forum for making deals; at least that is the premise behind DoubleClick’s latest proprietary product, DoubleClick Advertising Exchange.”
A mediated exchanged between buyers and sellers for the exchange of advertising inventory is not a new concept. Right Media is the best example of a well-executed version of this concept. I commented on Right Media several weeks back in Disintermediating Ad Exchanges, Publisher Ad Auctions. The argument back then was that in an ad exchange environment like a Right Media, where buyer and seller are brought together anonymously under an auction based environment, there is no relationship developed or fostered in the buy process. My proposal hypothetical question in that article was, what if you could eliminate the middle-man of the exchange and put buyer and seller together.
That article generated a response from Right Media. Bennett Zucker contacted me for a little education conversation. Subsequently, I wrote a follow-up comment acknowledging the value proposition of Right Media.
Some of the things that I learned my research into RM and other exchange models is that publishers are migrating away from the traditional networks because they are getting better rates through the exchanges. Inside sources have shared with me that Advertising.com, Tribal, Burst and other popular networks have all seen a measured decrease in publisher inventory while that same inventory has reportedly shown up on RM.
So now DoubleClick is going to enter the exchange game. Think back a while and recall that DC was one of the original networks. Of course I don’t believe there is a single person remaining at DC who was involved in that operation, but the heritage is there – and maybe some of the legacy technology. Regardless, they’ve built the exchange technology. They have the publishers with DFP and they have the advertisers with DFA. Put them together and link the two systems and you have a broad network of exchange. Get out of the way and you potentially have a model that will rival Google’s cake-and-eat-it-too mode of AdSense and Adwords.
DC has some challenges ahead of them. I don’t know the nuances of how well they are going to tie together DFP and DFA, but as hosted solutions they can upgrade and link the two and the users will see the collaborative efforts. If publishers start pushing inventory into the system and advertisers start looking into the system to buy, you have a strong value proposition for both sides of the transaction. Under this model, neither buyer nor seller needs to go to a different system like a Right Media to transact.
Under the DoubleClick exchange, it is largely publisher inventory that is at stake, whereas with Right Media is mostly network inventory. So will advertisers who use DART start to look at the exchange for publisher inventory – or will publishers first begin to test the DC exchange in addition to “offshoring” inventory to networks and auctions? Time will tell and the testing model of DC will be a good approach so the top-success-oriented players demonstrate the desired results. But this is one to watch closely as it could be game-changing.
Reactionary with Insight
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