Promise 4: The ability to highly optimize exchange buys makes them superior to less optimizable direct-site buys.
Sears: If you are looking for something that is repeatable, at scale, then yes, exchange buys are the way to go. If you are looking for something that is intentionally not repeatable and not scalable -- but deeply customized to produce impact at lower scale -- then direct site buys may be your answer. And one can complement the other.
Glass: This is certainly true, and we've seen this again and again. (By the way, ad networks have the exact same advantage as exchange buys vs. direct-site buys.)
Coelius: Optimization is easy to say and hard to do. Smart marketers should be very skeptical of those who talk the talk with claims of magic algorithms, and instead they should test constantly to see which DSPs can actually walk the walk and truly perform.
Promise 5: Cutting out middle men and buying in an auction-based model leads to lower CPMs.
Glass: Not necessarily. I think the auction ultimately is a more efficient way to expose value. Some impressions will be worth more and some less, but once the auction becomes efficient through more bidders and the consistent use of data, we should see impressions clearing close to actual market value. Ultimately that benefits all players in the ecosystem.
Coelius: At the moment prices on the exchanges are unnaturally cheap, and marketers who have learned to leverage DSPs are able to see tremendous return on advertising spend. Yet the reason why prices are cheap is that the good inventory is mixed in with worthless junk. Without a smart buying platform, it is easy to lose your shirt buying supposed cheap inventory.
Sears: Stop worrying about the money other people are making and worry about your own ROI. Look at media spend as an investment and not a cost management game, and you will stop putting impediments in front of you and your client. This should be a race to the top, not a race to the bottom.
Promise 6: Exchange buying give you a better chance to target niche audiences than site buys.
Sears: Yes, I'd agree. The emergence of real-time bidding (RTB) allows for the real-time assembly of audience and content at scales not previously achievable. Think of RTB as your own personal, virtual web property, customized just for you. Within the next three years, a client will be able to describe the virtual web property they want to purchase -- all aspects of audience, content, creative capabilities -- and will be able to purchase this on a spot or guaranteed basis. You want to buy guaranteed audience, content in an upfront market across the massive fragmentation that makes up the internet? Done. Not done like it is today with high operational cost, but done in a way that is technology driven but still requires highly skilled executives to design, execute, and modify the strategy for excellence.
Coelius: Scale matters. Without scale, niche audiences are pretty much worthless.
Glass: Largely false. I believe that highly endemic sites make it easier to find highly niche audiences than exchanges. There are some data providers (like Bizo) that can help to scale access to niche audiences within a specific vertical, but endemic sites will generally continue to have high value when it comes to finding certain highly niche audiences.
Promise 7: Targeting is king.
Coelius: Targeting does rock.
Sears: Unless you over-do it. Then the huddled masses will demand scale and overthrow the king.
Glass: Targeting will become more and more important, and ultimately those who have the most valuable and unique access to data will control media value and spend. Google, Facebook, LinkedIn, etc., are all trying to figure out how to have their tentacles (JavaScript, pixels, or similar) on as many pages as possible to see as many uniques as often as possible. This will ultimately drive huge value, and companies that can give them more and unique tentacles will be likely acquisition targets.
This is becoming more and more true. In addition to the value of "buying audiences" discussed above, as more impressions are bought via auction, targeting becomes critical to know what to bid for the impression. Thus, ultimately targeting will become king, and those who possess better targeting and more data will have an advantage over those who don't.
Promise 8: Major workflow and cost efficiencies are gained by running all of your media through a trading desk.
Sears: There should be. However, too many buys still use trading desks and DSPs for the same line items they allocate to ad networks and single sites. The savings and efficiency is missed unless you manage overall spend in a more dynamic and cohesive way.
Glass: Coming from a company that operates a trading desk and a traditional ad network model, I can say that there are definitely clear benefits to run all media through a trading desk from a workflow perspective. I think that the cost efficiencies are still less of a certainty, and we see that the ad network model with site transparency and control often delivers significantly more ROI than the trading desk model. Additionally, given the lack of transparency, marketers don't always know if they are hitting all audiences. Over time, as more and more media becomes transparent on the exchanges and the overall quality increases, the trading desks should be able to compete more effectively with networks.
Coelius: Some day all digital media will be traded in an automated fashion, and smart marketers who understand this are moving quickly to develop a new skill set.
Promise 9: Auction-based exchanges offer an even playing field on which smaller advertisers and agencies can compete.
Glass: False. Not today and likely not ever. Those agencies that have the resources to mandate volume and scale have the advantage today because exchanges and bidding are such a new concept. There simply aren't many (any??) small advertisers or agencies out there that know how to effectively leverage the exchanges, and even some of the trading desks still don't really know what they're doing. Just like on Wall Street, the smaller players tend to get left out in the cold, and the high-volume insiders generally have a significant advantage.
Coelius: At the moment, the playing field looks much fairer than it's even been. Small players can now get access to the world-class tools that previously only the big boys and girls could play with.
Sears: Yes, agree. Same great taste, less filling. Even playing field -- just invest in your people and bring your "A" game.
Josh Dreller is VP of media technology and analytics at Fuor Digital.
On Twitter? Follow Josh Dreller at @mediatechguy. Follow iMedia Connection at @iMediaTweet.
