Building an exchange(s) for online advertising

Came across this article in the WSJ on “Selling web ad space like pork bellies“. 

This could get interesting.  The spot market has been soaked up with Ad Sense, et al.  Futures market in ad inventory lends itself to the large players (MSN, Google, Yahoo, etc) and matching the supply and demand.  A company with a balance sheet could theoretically buy up inventory and corner the market…a la Salomon Brothers in the 1990s treasury market (if I were to take it to extremes).

Now layer in behavioral targeting (which is required to optimize CPMs and ensure a spread)….and a future market could be fantastically profitable to the likes of Yahoo and Google. Question: will sites with large amounts of traffic need ad sales teams pushing inventory when a “future’s” exchange and contextual ads can fill the inventory? 

The answer is yes.  I dont think ad sales departments are at risk of large scale layoffs anytime soon  If Wall Street is an indication or an analogy with the equity departments of investment banks – trading floors, sales traders and various equity capital markets servicing the primary and secondary markets,  an online ad market will need similar facilitation by the various components, including a robust ad sales team.

4 responses to “Building an exchange(s) for online advertising

  1. Pingback: Bringing Home the Bacon with the ADSDAQ Online Ad Exchange

  2. Jason, I came across your profile at Linkedin and jumped to your (very cool) website. I’m writing because I’m hiring a director of digital business development for Macmillan–we’re a publisher, but we’re also starting up several internet ventures. If you know someone who might be interested in this position, please have them get in touch with me and I’ll send along a job description. Many thanks, John Sterling

  3. Ad exchange would have bright future

  4. It is interesting to watch this unfold. The branded plays (newspapers, magazines, newstations, institutional offerings in the consumer space) all are trying to figure out how to deal with dilution of the CPM by working with ad networks but on the other hand, how to sell through the 50% of the unsold inventory on most sites.

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