ad network battle ground

Posted on March 1, 2010

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from paid content

Major publishers say they will continue to resist ad agencies’ media buying exchanges for fear of further driving down premium CPMs and losing control of lucrative audience data. The issue was one of the big debates at the Interactive Advertising Bureau’s annual meeting, Mediaweek reported and the two sides appear to be far apart. For the agencies’ part, the use of Demand Side Platforms—examples include real-time bidding exchanges run by Publicis’ VivaKi and Interpublic’s Cadreon—allows marketers to buy and target with much less waste and makes. They also argue that the premium ads are more relevant to a site’s visitors and therefore, makes the environment around publishers’ content less obtrusive.

Whether the publishers or the agencies are right about the effect of DSPs is beside the point, since advertisers will always adopt any technology that promises greater ROI and more efficient media buys. As David Moore, chairman of WPP’s 24/7 Real Media, put it, “The ability to maintain pricing for these premium properties is going to continue to decline. They are asking for $20, $30 and $40 CPMs, which are four- and five-times higher than [what DSPs can yield]. There are no must-buys anymore.”

Despite the rise of the exchange model both within and outside of the agency structure, Russ Fradin, CEO of vertical ad net builder Adify, said publishers could regain the upper hand by either selling all their ads directly or handing the complete sales process over to an outside firm that will protect the user data they collect and maintain control on their premium prices. The current “hybrid” model of offering some ad inventory across remnant ad nets and other automated buying systems is simply killing publishers’ brands.

For the most part, the issue is being driven by the increased uncertainty of the lingering recession, which has held back the ad recovery for both agencies and publishers. Ultimately, as the economic weakness persists, and both sides reduce the numbers of actual buyers and sellers, the automated path will likely lead to more arguments and ultimately, some form of grudging acceptance on the part of publishers.

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