Trust and Transparency – A view from ad:tech New York, 2007

— Dan Ballister November 9, 2007

At ad:tech New York this week, I had the distinct pleasure of co-leading a one-hour panel titled “Analyzing Online Ad Exchanges,” along with Imran Khan, Managing Director of JP Morgan Research.

Despite the obvious temptation on my part to talk about nothing but TRAFFIQ, I made every effort to avoid an enthusiastic sales pitch.

Although Imran and I opened the panel with brief presentations of the current happenings in the online ad exchange market, the most interesting part was, without a doubt, the Q&A session. Some takeaway thoughts:

• Sellers really do understand their inventory, and they are growing weary of the blind ad feeds that depreciate the value of their sites by peppering it with poorly designed or inappropriate ads
• Sellers are extremely wary of their future relationships with the three largest online publishers, as they continue to cannibalize the sellers’ audiences. These sellers are looking to independent ad sales channels to help them fully monetize their web properties.
• There are too many examples in the market of the wrong ads featured in the wrong place. For some recent proof go to Romney Accidentally Advertises On Gay.com (CBS News) or to Your Ad Here: Web Surprise Hits ’08 Race (New York Times) buyers definitely need more control over where their ads appear.
• There is an appropriate amount of skepticism in the marketplace, given the recent buzz about ad exchanges. It seems that many of us are skipping past marketing claims, and conducting solid research into which providers really do offer genuine transparency and control.
• Much confusion still exists as a result of all these dissimilar business models that call themselves exchanges. The best first step is to learn the difference between ‘Continuous’ and ‘Discrete’ auction models, and everything else will fall into place.
• JP Morgan sees an increasing migration of online ad dollars toward the exchange model. That’s good enough for me.

So what did I learn? Our marketplace is a lot smarter than it was 10 years ago, when we all blindly flocked to new advertising models. I also learned that online ad exchanges aren’t being pushed out into the marketplace. They are being pulled into the marketplace by buyers and sellers who want transparency, control and predictability in how online advertising programs are run.

It’s about time.