On DoubleClick Ad Exchange: More Digital Media Industry Reaction

Reaction To Launch Of DoubleClick Ad ExchangeRead more reaction on the launch of the new DoubleClick Ad Exchange, its benefits and any concerns from members of the online advertising ecosystem...

24/7 Real Media - David Moore, CEO and Founder

We welcome exchanges as they contribute to the simplification of buying advertising on the internet. Biggest concerns are inappropriate content for advertisers.

Acxiom - Christopher Marriott, VP, Global Managing Director

The launch of the Google's DoubleClick Exchange 2.0 means different things to 2 major constituencies: publishers and advertisers.

Publishers stand to benefit from increased competition for their ad impressions with this new platform. This platform introduces real time bidding for display ads, currently not available with Yahoo's Right Media exchange. This real time bidding will likely translate to increased CPMs to Publishers for valuable impressions. It will also potentially allow more ad inventory to be sold with Google's broad reach and efficient platform.

Google's new exchange is actually one of 8 or more display ad "exchanges" that are operating today. This compares to hundreds of individual ad networks. From an Advertiser point of view, exchanges simplify the ad buying process and offer greater transparency and broader reach. It is also possible to buy "ad impressions" through an exchange (versus just buying ad space on a page for all traffic), which allows for lower cost and improved targeting.

AdBuyer.com - Tim Ogilvie, CEO

I think the impact of the DoubleClick Ad Exchange is going to be huge. Google's bringing significant scale to impression-level bidding, which will allow marketers of all sizes to get a lot more scale from the data-driven buying techniques that are used successfully by the biggest buyers.

In my mind, this is similar to when Overture (then GoTo) started piping their search listings through AOL in 2000. Overnight, it turned paid search from a profitable hobby into a must-buy marketing technique. It took a few years for people to fully recognize and exploit the opportunity, but in hindsight it was a defining moment.

Regarding concerns, anyone who isn't worried isn't paying attention. Google has a massive concentration of search inventory and now a very credible display offering. They've clearly put a lot of smart technical talent into their display efforts and will follow it with marketing muscle.

We'd like to see lots of horses in the race. We think having a variety of options for buyers is incredibly important, so we're excited that both the established exchanges and new startups have launched or are actively developing similar offerings.

AdMeld - Michael Barrett, CEO

AdX 2.0 represents a solid step forward for a space that's really still in its adolescence. I think the scale and technical prowess that Google brings to the table will go a long way towards furthering the visibility and legitimacy of the exchange model, and from AdMeld's perspective, this product will introduce an added layer of demand that will directly benefit our publisher base. That said, it's critical for Google (and all exchanges) to continue the trend towards transparency on both the buyer and seller ends and strive towards an open marketplace.

AdReady - Aaron Finn, CEO

I think the near term impact of the DoubleClick Ad Exchange will be fairly minimal especially when it comes to advertisers. This exchange and other exchanges are really acting as semi-transparent networks and as we know there have been hundreds of networks operating for some time. Even Google mentions in their PDF today that "Only the largest brokerage houses actually plug into, say the NYSE." And they stated that ad networks and agency "holding" companies will act as though brokerage houses. So for advertisers and specifically the long-tail of advertisers it seems like they will continue to need technologies like AdReady and small agencies to help them with their digital marketing. AdReady's mission is to be the eTrade to Google's NYSE.

In the long-term, I think more ubiquitous and "democratized" access to display inventory will drive tremendous growth in the display market. Think about the 1.5 million search advertisers and the other millions of offline advertisers that will eventually be advertising online. Search doesn't have the scale to handle those budgets. Display does and bringing that demand in a cost effective way into the already over-abundant supply will create huge opportunity.

My biggest concern will be the independence of the exchange relative to Google's own sales efforts. I think it will be hard for them to keep the exchange and the algorithms running within that exchange at arms link to their own sales efforts. I don't think its long before display ads are showing up on Google's search results. If that happens what will the "exchange" recommend as the first buy a buyer should make?

Aggregate Knowledge - Paul Martino, CEO

Regarding the impact of new Google DoubleClick Ad Exchange:

  • DoubleClick will bring massive amount of inventory from DFP and AdSense publishers. We can expect inventory already sold by the publisher's direct sales on a preemptible basis to be available on the exchange in case a higher bidder exists.
  • Most of the larger agencies will test the real-time exchange model with audience-centric media buys. They expect to be able to control targeting and performance with cheaper media. However, supply will likely outstrip demand on the exchange for quite some time. Publishers will try various models (blind inventory vs. transparent inventory). Relatively quickly, publishers will make their inventory more transparent because, otherwise, they won't be able to justify their reserve bid price.
  • Agencies will start pooling demands across account teams to buy exchange inventory at larger scale, which will create frictions and discomfort within the agencies themselves (some centralized buying organization controls increasing portions of the media buys and cost/performance trade-offs).

Regarding any concerns...

  • Channel conflicts. How will publishers manage the conflicts between selling inventory at $10 via direct sales force vs. $1 on the exchange?
  • Control over available supply. Is AdX going to be a true, transparent exchange, where buyers have complete control over which impressions they get to see? Will Google implement pre-qualification processes that don't necessary put all bidders on the same level or might introduced a bias toward increasing CPMs for publishers?
  • Uncertain buying dynamics with irrational buying behavior. As real-time exchange are deploying their first publishers and advertisers, it is very unclear what the buying dynamics will be, making it harder to calibrate bidders. Will exchanges be offering enough transparency or infrastructure to help bidders calibrate their bidding strategy while more stable buying dynamics emerge over the next 12 months?

Audience Science - Jeff Hirsch, President & CEO

The impact of the new Doubleclick Ad Exchange launch is inevitably access to tremendous amount of inventory for display advertisers. Although this might lead to you to believe that this will depress the value of display advertising, pricing will have to be competitive with search listings, thereby creating a robust bidding environment.

Bluetie - David Koretz, CEO

In speaking with AdExchanger.com, Koretz provided several observations:

  • AdX is rumored to shift toward more of a performance-based model, which is a step in the right direction.
  • Shopping at an ad exchange is like taking a stroll down Canal Street in Manhattan. You are forced to sift through heaps of low quality inventory, and after a while it all starts to look the same.
  • The last thing advertisers and agencies need are more ways to buy remnant inventory. We would be better served to spend our collective energies on advertiser-centric ROI optimization that improves the product itself.

Brand.net - Andy Atherton, COO

AdX 2.0 appears to have two primary improvements vs. 1.0: Real-Time Bidding (RTB) and integration of GCN inventory. Both of these are significant developments. Assuming it works as billed, RTB will allow demand-side players of all sorts (advertisers, agencies, networks, etc) to leverage detailed user-level data fully in a scalable way. This is a big advance, assuming the simmering privacy issues around BT don't boil over. Integration of GCN complements the exchange in general and RTB in particular by opening up a large footprint of (mainly) long tail inventory for alternative monetization channels (other than AdSense). This is a great thing for GCN publishers and demand-side exchange participants alike.

Regarding concerns, both developments discussed above up the ante on demand-side players to build, buy or license tools that can meet their various marketing objectives in this dynamic, volatile inventory environment. So AdX 2.0 opens up more possibilities for those that want to participate, but the infrastructure and expertise required to fully take advantage of those possibilities is non-trivial, particularly for brand marketers. Channel conflict for publishers is also a concern and will likely limit participation in AdX 2.0 by top branded publishers in the near term.

Brilig - Paul Cimino, CEO

Regarding the Google DoubleClick's Ad Exchange, this is one area where Google is playing catch up with Yahoo and their RMX. Beyond that, I think that it is very important for Google to have a successful exchange. Given the evolution of the digital ad market from static / programmed model (basically duplicating the offline world) to a dynamic / liquidity approach, I think Google's exchange is absolutely necessary. Not having a Google exchange in the ecosystem would be like not having Macy's anchor your mall.

The market needs an exchange with a wider view of inventory from sites and networks. If Google is able to leverage its client base and integration capabilities from its other ad business units (Ad Word/Sense, DFP/DFA etc) they'll be able to deliver a true exchange which contains a variety of products; Just like a stock market except rather than stocks, bonds, futures and derivatives, ad buyers will buy premium CPM, network CPM, remnants, CPC and even CPA.

Regarding concerns, no real concerns here, but maybe a wish - We, as an industry, never discuss delivering value to the consumer. We talk endlessly about privacy and how non-PII data is harmless but saying "we aren't going to harm consumers" is hardly of benefit to them. When are we going to really do something and by that I mean when are the leaders of the ad-tech sector going to do something?

ContextWeb/ADSDAQ - Jay Sears, EVP of Business Development

We welcome Google to the ad exchange business. It’s terrific market validation to now have two, top exchanges in the market, including one that is independent.

DataXu - Mike Baker, CEO

The DoubleClick Ad Exchange is a major catalyst to the growth of real-time bidding. We’ve seen innovators that have product in the market that lack scale. But, Google will launch the first large scale advertising system with real-time bidding. That’s exciting - and it’s causing everybody to react. Most notably, other exchanges are hastening their pace. And we’re seeing ad networks and sell side optimizers open up real-time bidding interfaces. That’s Google’s effect.

eXelate - Meir Zohar, CEO

The arrival of Google into the Exchange market will create new opportunities for data providers such as eXelate to further enhance the value of non-targeted media, which will enable publishers to generate greater revenue from their advertising, while providing advertisers with better converting and more effective ads,” said Meir Zohar, CEO and founder, eXelate, the world’s biggest marketplace for behavioral targeting data. “The key for Google is to keep the exchange Open, thereby enabling integration of third party data and bidders. This will create some real optimization opportunities for advertisers and monetization opportunities for publishers.

Exchange platforms like Yahoo’s Right Media and AppNexus (where eXelate has built deep integrations) have followed this open strategy to the benefit of their advertisers and inventory partners alike.

Forbes.com - Jim Spanfeller, CEO

Jim Spanfeller, CEO of Forbes.com, told AdExchanger.com that he needs time to assess
Google DoubleClick's AdX exchange benefits for the publisher but adds, "The world does not need another ad exchange unless there are significant differences to it. One of those differences might be the use of data...which of course gets at the whole privacy issue."

Invite Media

Nat Turner, COO

Google AdEx 2.0 is going to be a huge event in the space. If all goes according to plan, they will be bringing on a lot of new inventory via a real-time bidded integration which really cranks up the heat on the whole space and the scale of exchange buying in general. I can tell you that many buyers are eagerly awaiting the official launch, and are also very eager to see the affects such a launch will have on their campaigns and strategy.

Zach Weinberg, CEO

One thing I'll add to Nat's comment is that the key here is to give it time to evolve. The exchange is a great step in the right direction (and a good market validator) but it's going to take a few months to get the proper momentum going. I think the end of 2009 will be a great time for early testing and success on a small scale and 2010 is where you'll start to see significant adoption and growth.

MediaMath - Joe Zawadzki, CEO

It's the troika: scale, transparency, impression-level bidding.

First order benefit will be to enable google supply in this way, which given their reach is great for buyers.

Second order benefit is more significant though, which is that as goes Google, so goes the market. Once Google applies open and free to a market, closed, opaque, and expensive becomes hard to support. Other exchanges and networks will have to lean into impression-level bidding, more buyers will find ways to get access to RTB supply, publishers that may have been move slowly into participating on exchanges will move more aggressively to get access to the increased demand. A most virtuous circle.

Perhaps my only concern is that it's early days. A lot of people are going to build their businesses on Google's ecosystem in short order, once you come to rely on it, having that platform change dramatically in six months or twelve months would be quite disruptive.

To be clear, it's a very good day.

RocketFuel - George John, CEO

Google DoubleClick's new exchange (AdX 2.0) is great for a smart ad network like Rocket Fuel. All of the exchanges have some tragic flaw or are missing some critical feature that we need -- ADX 1.0 had great quality inventory and a good auction mechanism, but was painful to use because it lacked an API so our ops team had to spend a lot of time manually configuring campaigns. The ADX 2.0 API and real-time bidding wil allow our technology to interface directly with ADX to optimize targeting and bidding for our advertisers, which is a huge advancement and will be great for us and our customers.

Regarding any concerns, the biggest concern is perception. Some exchanges haven't done a good job filtering safe content versus edgy or outright pornographic content, and this gives exchanges a bad rap. Not all agencies and advertisers understand how exchanges enable their ad networks to be successful.

TRAFFIQ - Scott Portugal, SVP of Global Business Development

The immediate impact of AdX 2.0 is two-fold. First, it should create the efficient path that search-only marketers have needed to test the display space. As many recent studies have told us, display and search have powerful combinative properties. When advertisers who have traditionally been "scared" of display are able to see the lift in ROAS that display creates, this should allow them to shift offline broadcast budgets online with greater confidence.

Second, it's further validation that the concept of a centralized media management platform can extend beyond simply agency-owned RTB systems. As we all know, Google is looking to join Ad Planner with DFA/DFP/DFE, hook that to AdX, couple THAT to Google Analytics.

Regarding concerns, unfortunately, yes. If I was an agency, Google's ability to understand advertisers' display performance metrics in addition to their search performance metrics, and to control delivery against those, would give me pause. Agencies are struggling to control their own data and decisioning (see WPP's change of data-ownership terms and the entire push towards agency-owned delivery platforms); giving additional display media data back to the company that sees 80% of my search data is something I'd think twice about.

Additionally, Google's delivery capabilities are huge - 6bn impressions per day. While that volume and Google's optimization intelligence provides for scalable delivery, it provides limited brand control at best, none at worst. If an advertiser remotely cares about their brand, Google's current display supply chain is fraught with risk.

Triggit - Zach Coelius, CEO

Google's DoubleClick Ad Exchange will be huge for the real-time bidding space. Google validating RTB as a standard significantly solidifies RTB as the core of next generation ad platforms. Large scale ad buyers who want access to Google's inventory are going to need to make the investments to upgrade their platforms to deal with the technical requirements of real-time impression valuation and matching. The automated ecosystem of publishers, exchanges and buy-side technology is finally happening.

For the other players in the exchange space it is a real shot across the bow, either catch up and launch transparent RTB or get left in the dust. I think Google has a real chance to own the display exchange market in the same way that they own search.

Turn - Bill Demas, CEO

In regards to benefits of the DoubleClick Ad Exchange:

  • We see this as a great opportunity for both advertisers and publishers. AdX 2.0 will allow advertisers access to publisher inventory that they simply wouldn't be able to access on their own. (and vice versa)
  • Advertisers that are looking for remarketing and behavioral reach are now given an open door to the Google AdSense inventory with the confidence that they can run their campaigns only on sites that meet their brand's quality guidelines.
  • For a company like Turn the fact that AdX 2.0 offers unprecedented reach and can facilitate real-time bidding is key. AdX 2.0 with real-time bidding gives us the opportunity to offer this precise level of targeting with scale.

Regarding concerns:

  • The standard fears agencies have around ad exchange inventory is whether you can control the site quality. Since AdX will not be allowing ad networks to resell inventory, most of these concerns are alleviated. Furthermore, they have a very robust content qualification and segmentation process that provides the ability to create a brand-safe environment.

Undertone Networks - Eric Franchi, SVP, Business Development

While AdX 2.0 appears to attempt facilitate a better RFP process for DART advertisers, it will be a long time before agencies are acclimated to the new process. This also creates a buy-side issue for Google: buy-side exchange management is a position that largely does not exist at agencies or marketers. Then factor in the lack of control and long-tail media placements and it’s easy to see why exchanges continue to be the domain of the many ad networks who use it to source inventory from each other, and not brand advertisers.

Many publishers I've had conversations with over the last few months are very concerned that putting their inventory out on exchanges will harm their direct sales efforts. That is the reason why they don’t work with exchanges currently and don’t plan to in the future — and that includes AdX 2.0. This will be a major hurdle for Google to overcome from the start. On the positive side, it may eliminate some of the network clutter which would make life easier for agencies and advertisers.

The launch of AdX 2.0 is a definite threat to the "inventory optimizers" like Rubicon and Pubmatic. If the optimizers' clients find the exchange efficient in inventory management and yield, there may be little incentive to pay another party for the service.

[x+1] - John Nardone, CEO

We are excited about Google's release of AdExchange 2.0. The incorporation of Real Time Bidding into the system promises to make a flood of data about consumers actionable for ad targeting. Our optimization system is data-hungry; the more information we have access to, the more effective our predictive models are at increasing response and conversion. Now we can bring our own and third-party data to the exchange.

In addition, the integration of both AdSense and the Google Content Network (GCN) inventory into this release has exponentially increased the total amount of exchange-available inventory. With more inventory to choose from, we can be more selective than ever at picking which consumers to show particular offers to, and at what prices. Finally, Google is providing both contextual information and a level of quality assurance that makes this a very brand safe environment for our clients.

Yieldex - Tom Shields, CEO

I think exchanges like this are the future of performance-based advertising. And Google has the liquidity and the resources to be successful. But I do think a significant percentage of the market will continue to be guaranteed purchases of audiences or contexts, where performance is a secondary consideration, and those will not be well-served by impression-based exchanges.

Agency Reaction

For reaction from the media agencies, visit the links below:

1 Comment

Add a comment

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>