LeadsCon Panel On Ad Exchanges Provides One of Many Highlights During Day Long Lead Generation Event

LeadsCon EastYesterday's sold-out, LeadsCon East convention in New York City brought together the lead generation community for a two-day event focused on, of course, generating leads as well as putting more tools in the hands of direct marketers.

Conference organizer, noted blogger and former super seller, Jay Weintraub gave attendees a healthy dose of the potential of display advertising as several panels brought together technology companies, platforms and data providers who revealed the value that they are adding to their part of the exchange ecosystem - and how they can serve marketers.

In a thought-provoking afternoon panel led by Rob Deichert, SVP of Publisher Ops & Yield Management at Platform-A/AOL Advertising, panelists discussed the demand-side platform evolution, key recent milestones and their meaning to marketers.

Antony Taylor, who is Director of Professional Services at Yahoo!'s Right Media, provided his perspective on exchanges today - and tomorrow:

I think exchanges were fundamentally about sorting out two problems: inefficient distribution of supply from publishers; and ineffective pricing methodologies from publishers. We saw ad networks mediate and take disproportionate margin because of those inefficiencies. What exchanges didn’t do is solve the three most important advertiser problems: managing frequency and user interactions; allowing advertisers to leverage their data and insights across different supply sources; and then a little bit around the workflow friction, bid management and self-service capabilities that advertisers need to drive ROI.

So when I think about where we are today and where we need to go, I think that the way exchanges are being used today by publishers to efficiently distribute their inventory is important, but it is Phase I of an industry evolution. Phase II is going to be about marketers and saying how do we figure out how to reduce the friction between supply marketplaces and the technology running those supply marketplaces.

Getting into demand-side platforms (DSP), Nat Turner, COO of Invite Media discussed media agencies' announcements around buying platform strategies:

Agenices predominantly don’t know how to take advantage of the exchanges.

What we’ve seen – and what we want to see more of - is agencies that commit spend and move it away from ad networks and put it through a direct platform. What we’ve done at Invite Media is bring all the exchanges under one platform because every exchange has their own way of integrating.

To an agency who has very limited resources, they can’t take advantage without growing. The easiest way to take advantage of exchanges today is through audience-based buying. Agencies are doing tons of DR-based buying.

Later, Turner discussed the complexity of display and how this may be a challenge for the current structure of the agency model:

You actually have to put in a lot of work to make these [display] campaigns work across exchanges. My hope is that agencies continue to move dollars away from ad networks on to their own systems. I hope. Where I think they’ll be is I think they’ll be too sensitive to firing the 800 media planners and buyers they have, and will continue to buy direct from publishers and ad networks. I think there will be more ad networks. I think that exchanges will produce many more smart people, and the exchanges just breed opportunity for agencies to continue to be lapped.... The agencies have some really tough decisions to make, and I hope they make them.

Benefits of the exchange model to the direct marketer audience were also a hot topic as Payam Zamani of Reply.com had a different take in response to Rob Deichert's question:

What we decided is that we are going to create categories of intent, create a marketplace for automotive traffic, for example. What we do is generate traffic through our exchange and our own marketing efforts and then present a jump page in front of them and ask them about the model they’re interested in and their zip code.

At that moment, we know the intent of the user, we’re not trying to guess with behavioral targeting. The consumer just told us which allows us to offer online, locally-targeted advertising without the advertiser having to learn bid management, quality scores – any of these things that a local advertiser will never want to learn. We felt that that was the way to get the local advertiser engaged and it has worked for us.

Brian O’Kelley, CEO of AppNexus, took on another hot topic and gave attendees a sense of what real-time bidding (RTB) is as well as how difficult it is to pull off:

The challenge is that over the last 5 years as supply has "dramastically" overtaken demand, the buyers are realizing that they can cherry pick and choose exactly who and what they want to buy. So, buyers are asking for more power and control and the way to do that technically is what we call “real-time bidding” which means that the publisher before they serve the ad actually asks the buyers what they’ll pay, and then the price comes back and the publisher can make an informed decision. It takes the idea of yield management from a scientist sitting in a room figuring what ads to show to, basically, just asking the buyers which sounds fairly naïve but it’s incredibly technically complicated. When you’re serving at the scale that Right Media does inside Yahoo!, I bet it’s 200,000 requests/second at peak times across 8 or 9 datacenters. If you want to spit those impressions out to buyers across the world, it’s very technically complicated to think about how you get responses in an amount of time that is acceptable to publishers. So, if it’s Yahoo!’s own inventory, they control that, if it’s another publisher, newspaper site, Ebay, or a Right Media client, how will they actually do that without seriously affecting performance and delaying websites? That’s the technical problem of real-time bidding.

Second problem is, ok, great, I’m a buyer, now there’s a firehose of traffic coming in to me. Most buyers are buying a million ads a month. If all of a sudden you get 200 Billion ads a month coming in from Yahoo! or, if Google AdEx numbers are correct, 800 billion ad requests a month, the amount of technology you’d have to build and its scale just to go buy a few hundred million more ads is kind of crazy. And so, what I think Invite Media does on the buy side is build an ad serving platform that actually integrates with all of these sources of inventory. Appnexus is a “plumbing” company – we sit in the middle - that tries to solve the technology problems for both the buy and the sell side and connect all these dots. I think the reason its relevant is less because it’s “cool,” and far more because it opens a whole lot more inventory for buyers to have more control and that’s incredibly relevant to all of the points we’ve made today: efficiency comes from control. This is a mechanism for control over all the inventory and audience on the Internet today.

It was a great panel with many insights - these were just a few. Congrats to all involved and Jay Weintraub for having the foresight in bringing this and other display ad panels together. The LeadsCon crowd may not be diving at display today, but Weintraub realizes that they will be, and that it's important to get exposed early on to take maximum advantage.

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