I suppose that the argument about the future of Ad Net vs. an Ad Agency must also be critically evaluated from the point of view of an Advertiser. A top-down approach to evaluating the scenario would be to think from the point of view of demand rather than the supply or intermediaries like ad nets and agencies.

You see, if advertisers can develop internal practices that favor audience vs. impression buying to predict conversions then we have a lot to talk about. The argument being given currently is that the Publishers are skeptical of putting their inventory to the exchange due to fear of sales cannibalization. The assumption here is that there will always be advertisers who are willing to purchase 'class 1' or guaranteed inventory. If however, the advertiser moves away from guaranteed to spot buying through RTB-where does that leave the publisher sales force? Advertisers have a million other ways besides display to send their message across but publishers do not have much choice other than to cave in eventually and start offering more and more of their inventory through the exchange.

WHEN that happens(and i would be surprised if that mindset change is too far), the landscape will be ruled by SSPs, DSPs and cookie banks and of course a bunch of media savvy geeks(yay!). Then the requirement from an advertiser's perspective will not be to find inventory (a large part of the reason to choose an ad network anyway) but to ensure a smooth operation of campaigns and effective optimization feedback that can fine tune future campaign cycles.

I hope I am making sense in what I am trying to communicate here. That the requirement for both ad nets and agencies is to develop skills and offerings around a services layer that will need a much (MUCH) greater focus on technology as opposed to media planning and buying as it is practiced today. Algorithms are coming and the only way to avoid loosing a job/client to them is to gear up!

I suppose that the argument about the future of Ad Net vs. an Ad Agency must also be critically evaluated from the point of view of an Advertiser. A top-down approach to evaluating the scenario would be to think from the point of view of demand rather than the supply or intermediaries like ad nets and agencies.

You see, if advertisers can develop internal practices that favor audience vs. impression buying to predict conversions then we have a lot to talk about. The argument being given currently is that the Publishers are skeptical of putting their inventory to the exchange due to fear of sales cannibalization. The assumption here is that there will always be advertisers who are willing to purchase ‘class 1’ or guaranteed inventory. If however, the advertiser moves away from guaranteed to spot buying through RTB-where does that leave the publisher sales force? Advertisers have a million other ways besides display to send their message across but publishers do not have much choice other than to cave in eventually and start offering more and more of their inventory through the exchange.

WHEN that happens(and i would be surprised if that mindset change is too far), the landscape will be ruled by SSPs, DSPs and cookie banks and of course a bunch of media savvy geeks(yay!). Then the requirement from an advertiser’s perspective will not be to find inventory (a large part of the reason to choose an ad network anyway) but to ensure a smooth operation of campaigns and effective optimization feedback that can fine tune future campaign cycles.

I hope I am making sense in what I am trying to communicate here. That the requirement for both ad nets and agencies is to develop skills and offerings around a services layer that will need a much (MUCH) greater focus on technology as opposed to media planning and buying as it is practiced today. Algorithms are coming and the only way to avoid loosing a job/client to them is to gear up!

So Google is unbeatable? Right. And that means we abandon the model in case we get crushed by the big G. Not every publisher is going to use Google to rep inventory; not every agency is going to use Invite or DFA; and not everyone is looking to get bought. One big eco-system will evolve and Google will be one of many players. Don't get lazy now, and outsource all your ad-tech requirments to Google because it will eat your service layer business alive. Fact.. Just my two-cents.

There is no way there'll be one common exchange for trading ad impressions. Too many vested interests involved. But given that everyone is working with each other anyway, the one uniform market you spoke off might not be too far off. Of course, Google could end up conquering all. There are some workarounds for creating an index to maintain sustainable pricing. Have a look at a start-up out of Paris who are attempting to benchmark pricing across different exchanges and SSPs – advaluation.net.

Anyone interested in the idea of common exchange – a la NYSE or LSE – that acts as a clearing house for buyers and sellers should read Jerry Neumann's recent post on the subject, “The Last Dys Of The Exchange” – http://reactionwheel.blogspot.com/2010/06/last-days-of-ad-exchange.html. As Jerry points out, this might actually happen organically anyway as lack of liquidity in the market – or “sustainable pricing” – might keep away media buyers and publishers. By the way, I am not a media maven. What the hell is a maven anyway?

Retargeting! Slip a few cookies in, take credit post click and whamo, you have a business model.

Do advertisers know the con yet?