Friday, March 26, 2010

Supply Side Exchanges - They Are Coming

The venture community is very excited about the promise of demand-side exchanges - markets whereby advertisers can buy audience independent of publisher.

To date, advertisers have bought "audience" via publishers who provide demographically/topically relevant audience. If you want to buy sports enthusiasts, ESPN is a good buy. If you want to buy car lovers, Edmunds is your ticket.

Demand side exchanges theoretically allows advertisers to buy audience anywhere on the web and rely on various targeting technologies to match ads to audience - you can now buy a sports enthusiast across the web at large and not just via sports sites.

The net effect of ad networks and demand side exchanges is to put tremendous pressure on tier one publisher CPM rate cards - why spend $15 CPMs on ESPN when you buy the "same" audience for $3 CPMs through an ad network or exchange.

Publishers are being force to do two very important things:

  • pull inventory off exchanges and ad networks to maintain their pricing
  • break the fungibility argument by delivering more custom, more rich, more engaging ads than those available through a network or an exchange
In my meetings with publishers, it is clear that they are moving to pull their content off the exchanges and our working quickly and thoughtfully to develop custom ad products that outperform display and serve to add value to the advertiser beyond audience alone.

The next logical development, in order to raise net fill rates, will be to develop supply side exchanges - whereby tier one publishers pool unsold inventory and offer it on their terms for premium prices.

Demand side exchanges will be left with remnant crap inventory, and the tier one publishers will work to add value via direct sales, pooled inventory, and through in-house product teams that deliver high-value ad experiences.

I am not bullish on demand side exchanges and feel they will be left holding the bag as the premier sites build a supply side exchange and refuse to allow networks or exchanges access to their premium content.

Tuesday, March 23, 2010

DEMO 2010

I am sitting at the Palm Springs Airport after three very successful days at DEMO.

Giles Goodwin and I presented the ClickTurn Ad Builder - a self-service platform for building rich media ads and HTML 5 mobile sites.

ClickTurn is a self-service platform for building rich media ad units and HTML 5 mobile web sites. In minutes, publishers and advertisers are able to build rich media ads and mobile sites that leverage the richness of the real-time web.

The ad and mobile site builder support YouTube, Twitter, Facebook, Blog and other content sources, while also providing templates for polls, lead gen forms, and other forms of engagement.

ClickTurn is currently working with LinkedIn, CBSi, IDG, Forbes, FedEx, Cisco, Sprint, Qwest, Panasonic, Gap, HSBC, the Gap, etc to deliver ads that are realizing ~.8% CTRs and ~15% engagement rates.