Razorfish’s Digital Outlook Report 2009: Ad Exchange

We’ve been talking about private & public exchanges a lot in my eBusiness class over the last 2 month. So when I got to Razorfish’s Digital Outlook Report for 2009 that mentioned ad exchanges, I kind of got excited because it’s an area I’ve been learning, studying and writing a lot about over the last couple months. Razorfish had some thoughts on that area:

Ad exchanges provide three primary advantages for digital marketers:

1.  Auction-based, spot market: Advertisers can buy inventory on an impression-by-impression basis — in real time. No upfront commitments  are needed to secure delivery. Data portability.

2.  Data portability: Advertisers can layer data on top of inventory to cherry-pick their target customers.

3.  De-averaged pricing: Advertisers can set variable prices for different types of inventory — and different kinds of customers. Rather than paying a flat CPM for a specific placement \ or behavioral schema, they can now price each impression according to its expected return.

One of the concerns for ad exchanges was the privacy of consumer’s data. This is one of the major issues with public or private exchanges. You’ve to make that you are protecting your customer’s data because they could up and leave if they don’t feel it’s safe. How many clients did CIBC lose in 2007 when it lost a hard drive? Privacy is important but the idea that you are adding value to the clients business is important.

With 4 potential ad exchanges competing for advertisers, publisher and clients money, it’s going to get very competitive in 2009 as they try and show they can provide value over the long term. Vaue can be both tangible and intangible but I feel that tangible values are going to be more valued in 2009 with the recession we are in. In the end, Razorfish has some good ideas but adding value and privacy of customer’s data are also going to be sticking points for ad exchanges in 2009.

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