iMedia Connection: How To Look At An Ad Exchange

The technological advances in digital display advertising systems bring this powerful medium into the reach of a huge number of new marketers - small and medium sized businesses jumping into managing their brands online, grabbing all the reach and customer engagement they can.

For some marketers, a major part of the solution is in using an ad exchange - an intermediary between themselves and the websites they advertise upon. Marketer using an ad exchange are media buying -exchanging dollars for appearances of their ad on websites.  The appearances being purchased are called impressions - and the cost number is called CPM - cost per thousand impressions.

iMedia Connection's Tim Suroweicki has put together a great piece on what an ad exchange does and how to look at one.  He does a nice job showing what ad exchanges do well, as well as what they're still working on.

Enter ad exchanges, the "supposed" future of online media buying. But are they?

Online ad exchanges take their cue from search marketing's auction bid model of aggregating the entire universe of advertisers, publishers, and networks within a single platform. This allows for centralized placement, management, and optimization of display buys across any number of online publishers.

Through an ad exchange, advertisers and agencies can determine what CPM or CPC they are willing to pay for a target site, then bid for that CPM/CPC to reach the audience without the hassles of negotiation. This is done while accessing broader, cheaper inventory without the significant ad network markup. At the same time, exchanges provide better website transparency, not to mention an ability to assess and adjust campaigns on the fly.

All of this adds up to a more flexible, more intuitive environment for online media buying that has the potential to maximize both dollars spent and ROI. And the major players are already getting in on the action. Microsoft, Google, and Yahoo all have media exchanges under their advertising offerings and are now in the process of rolling out the next generation of exchanges with real-time bidding, which is seen as the holy grail of media buying.

Read the entire article here.