The online ad exchange marketplace has not evolved to opportunities for insider trading and $50 BILLION scandals - let's hope rules are in place to stop illegal trading as liquidity increases. But, other marketplaces are already feeling the pinch which should serve as reminder that it's not too early to begin thinking about regulation for ad exchanges.
From the Chicago Tribune comes word of First DIBZ, an online marketplace for the selling of sporting event tickets, and the recent, unfortunate appearance of traders offering bogus playoff ticket inventory on their exchange this past weekend.
First DIBZ allows fans of sports franchises to buy "options" on future playoff tickets from sellers who are required to deliver the tickets at the option price if the team makes it to the Major League Baseball playoffs, for example. Ticket brokers and others looking to make a profit off the buying and selling of playoff tickets also partake. Over its 8 years of existence, the company has had only 8 instances of complaints to the Better Business Bureau according to the Tribune.
In this case, the perpetrators were offering Super Bowl tickets - loads of them for all the teams involved currently in the NFL playoffs at cheap prices - in spite of the fact that the Super Bowl was only weeks away. By carefully choosing their time to strike, a Sunday evening, when much of the First BIDZ office was apparently at home, the ticket traders wreaked havoc. Ironically, they were a long way from making money.
Rick Harman, First DIBZ co-founder, told the Chicago Tribune, "We didn't really see it happening … it's incongruous to think a person would spend time to post up stuff for sale, knowing they're not going to get a penny for it until they deliver the goods," Harmon said. "They had had to sign an indemnity and liquidate any damages with a credit card."
Even though First DIBZ was fooled this time, its exchange's controls prevented a much larger fraud.
Industry-wide exchange regulation for the advertising exchange industry, however minor at this time, would be a good start in preparing for the exchange model's larger future. Forming a regulatory body (not the IAB - a toothless, industry marketing organization and lobbyist) wouldn't be a bad PR move either.