Digital Media Buzz > Google Gets Into Ad Swapping

Google Gets Into Ad Swapping

By Dave Fidlin

Google officials liken it to stock trading. Or perhaps an exchange at a swap meet through cyberspace.

The company recently took the wraps off its latest innovation, the DoubleClick Ad Exchange, after months of speculation by industry insiders.

The real-time service, described by Google officials as a “public exchange,” is being touted as an open marketplace for online publishers of newspapers, large portals and entertainment and branded sites to sell off excess inventory to advertisers, who presumably will buy the space at a bargain price.

While it is best known for its popular search engine and email services, Google in recent years has been branching off into other areas within the digital media industry, particularly the graphic display ad market that is dominated by rival company Yahoo.

DoubleClick has been a part of the Google corporate umbrella for several years. Google announced its intention early in 2007 to purchase the company, which at the time was already an established player in the digital marketing industry. The deal was consummated later that year.

Rachel Nearnberg, an associate in Google’s Global Communications and Public Affairs office, says the DoubleClick Ad Exchange has been well received thus far by buyers and sellers in the digital ad market.

“The new Ad Exchange already includes over 40 ad networks from the U.S. and Europe, including most of the 25 largest ad networks in the U.S.,” Nearnberg says. “It already contains a variety of large premium publishers.”

Some of the buyers that have signed on to the service weeks after its unveiling include MediaMath, OMG Digital, Rocket Fuel, Tribal Fusion and VivaKi, according to Nearnberg. Sellers include About.com and eHarmony.

In a statement, MediaMath, a New York-based digital media buying platform and services company, has been utilizing DoubleClick Ad Exchange for its trading efforts. Mark Mannino, vice president of supply and data for MediaMath, says the recent upgrade has been a positive for the company. “Version 2.0 is really exciting for us for a number of reasons,” Mannino says. “We’re now having access to the AdSense inventory, where before it really was a private playground.”

In addition to the greater access to ad inventory, Mannino says the real-time features allow MediaMath to “make changes on the fly” for bids. Additionally, he says the transparency enables MediaMath to work with clients and give them a greater opportunity to pick and choose what sites they want their impressions to run on.

Neal Mohan, Google’s vice president of product management, says the Ad Exchange was used with the company’s existing technology and infrastructure. The intent, he says, is to provide buyers and sellers with a more efficient experience.

“Better technology can help make display advertising work better for all involved,” Mohan says in the statement.

The Exchange will incorporate elements from two existing Google programs: AdWords, a pay-per-click advertising service; and AdSense, a service for publishers that is designed to post custom ads based on the audience’s interests on a particular site.

The Ad Exchange also will feature such enhancements as real-time bidding and a new application programming interface (API) specifically designed for ad networks.

Because it is a new service, company officials are adopting a wait-and-see approach to determine how the Ad Exchange will be measured for effectiveness. Based on preliminary dialogue with both sides, Nearnberg says it has been an early success.

“The feedback from ad networks and publishers so far is that the DoubleClick Ad Exchange contains improved technology and features,” Nearnberg says.

Officials at market research company comScore declined to speak specifically about the Ad Exchange. “It’s difficult for us to comment on somebody else’s initiatives,” says Andrew Lipsman, comScore’s director of marketing communications.

Lipsman did say, however, that the company maintains its stance on what criteria advertisers and publishers should be looking at when setting ad rates, whether in a traditional setting or through a more open market such as the Ad Exchange. Working solely off data from clicks is not a practice comScore supports. “In most cases, it’s not the right metric to be looking at,” Lipsman says. “The industry needs to get out of the mindset that a caption is only effective if somebody clicks on it.”

Other methodology comScore supports include brand effectiveness studies, online and offline sales related to a particular campaign, a holistic look at website visitations and trademark searches. “This sort of methodology is much more reliable,” Lipsman says.