Is It an Exchange or a Network?

— Dan Ballister May 11, 2007

Caveat emptor. Caveat venditor. If you're one of the few people on the planet who still understands Latin, you probably know that caveat emptor means “buyer beware.” But I'll bet most Latin majors have forgotten the other side of this coin, caveat venditor, which means “seller beware.” In this increasingly confusing media world of online networks who are masquerading as exchanges (yep, exchange is the “it” word of 2007 for online marketers), emptors and venditors better use lots of caveat in the coming months as the largely misunderstood exchange category explodes in the digital media space. There has been quite a bit of chatter over the last six months about exchanges, but there still seems to be a general level of confusion or lack of understanding about what actually constitutes an exchange, and how they're different from the dozens of ad networks that currently exist. So consider this to be our first attempt at actual transparency “an honest-to-goodness best effort to explain what's actually going on, with a limited amount of hype for our own platform,” TRAFFIQ, the Internet Traffic Exchange, which launches on July 23, 2007. This is, after all, our website.

In any kind of market that has an open, truly transparent exchange, there is NO data advantage. We've all read stories in the last few years that detail the malicious efforts of finance or corporate types trying to create a data advantage by front-running big trades, illegally sharing insider information, or withholding information. We all saw the perp walks on CNN, and regrettably, many honest people lost lots of money at the expense of gold shower curtains, insider trading, and other forms of illicit data manipulation. On the other hand, we all know people (maybe you are one of them) who actually study available data and publicly disseminated, free information, then draw meaningful conclusions, act against them, and realize a legitimate competitive advantage based upon those efforts.

One could make the conclusion that in the end, none of the self-proclaimed “exchanges” in our industry are fully compliant with the official definition of the word. Most are ad networks trying to ride the wave of popularity associated with this buzz about exchanges. Some are aggregators of ad feeds who offer auctions only on one side or the other of the buyer-seller relationship. Some offer “seats” on these alleged exchanges, others preach about “unloading remnant inventory.” In reality, when compared to how financial markets operate, the most accurate definition for what most of us in the digital world think of as an exchange is actually a bulletin board, a place for sellers to list inventory that's for sale, and allow interested buyers to bid for it. But exchange is a cool word, it sounds better than “bulletin board”, and in the end, if a platform is truly open and transparent about who's participating and what the terms are, and there's genuine democracy in access to data, we think it's ok to use the word “exchange.”

So what is TRAFFIQ.com? TRAFFIQ.com is an auction-based, genuinely transparent, data-rich, open digital media buying-and-selling exchange that allows buyers and sellers of all forms of digital media to efficiently find each other, arrive at satisfactory terms, close a deal, and execute online ad campaigns across a feature-rich, user-friendly advertising exchange. Buyers want time-saving tools and honest transparency in pricing and placement; sellers want higher sell-thru and better yield from their ad inventory. They both want better process, easier “findability,” and lots of data. Billions of dollars currently move around every year in closed, blind network many publishers have no idea what ads might show up on their site, how much they're actually earning from these ads, or if those terms are fair. Many buyers have no idea where their ads are appearing, whether or not they paid too much, or what their true return against that ad spend actually is. TRAFFIQ.com has not been designed to be an interface that bolts onto an existing ad network, but instead to offer buyers the advantages of a platform that markedly reduces their cost of servicing the media they buy, while offering sellers the natural forces of market efficiency that organically reconcile and balance price against value. In addition, the sophisticated-but-simple tools we've developed will offer decided financial advantages to buyers who maximize their conversion efficiency, and to sellers who fully exploit tools that will aid in segmenting ad inventory in its most desirable, discrete units.

In the end, an exchange allows a market to achieve its maximum efficiency, and we're committed to delivering exactly that kind of product into the marketplace in July. As you know, an exchange also requires liquidity to be a useful tool, and fortunately, many buyers and sellers we've met over the years have already agreed to participate. So come take a look for yourself, or let us know if you'd like to participate in our invitation-only beta program. TRAFFIQ will quickly become the place where the smart media money trades, and where emptors and venditors will think a lot less about caveat, and a lot more about “lucrum” (that's Latin for profit).

Regards,

Dan Ballister
Chief Operating Officer
TRAFFIQ—The Internet Traffic Exchange