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Internet Ad Exchange – Selling pork futures

There's an interesting article – "Selling Web Advertising Space Like Pork Bellies" in today's WSJ that provides background and commentary on the emergence of online exchanges for Internet advertising.

I wrote my first post on this topic ("On-line advertising – imperfect pricing") back in February and there have been many developments since then such as DoubleClick announcing an online exchange and now others such as Right Media getting into the same business.

The article also has an interesting snippet about the potential for this to be used by publishers to optimize the revenue they generate from their advertising space:

"With ad exchanges, member advertisers specify the price they're willing to pay for a certain type of ad spot, such as a banner ad that will be viewed by a female in Boston. When a woman in Boston pulls up a Web page of an exchange member with a banner slot available, software assesses the exchange's offer. If the price offered is better than the site's minimum rate for that page and higher than what it can get from other sources, such as ads sold by its sales staff, the site will usually accept the exchange-brokered offer."

As I mentioned in my post on optimizing revenue for publishers, I think this is an interesting space for a start-up. As with exchanges in the physical world, there will be the need for additional services built around the exchange to add value and help parties on both sides of the transaction optimize their revenue.

Online ad exchanges are a fascinating space!

 

 

Comments

John Ebbert

We agree.. it's a fascinating space and we believe ADSDAQ will be truly different from other online exchanges. Feel free to check us out, Stu:

http://blog.contextweb.com/contextual/bringing-home-the-bacon-with-the-adsdaq-online-ad-exchange

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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