One of the most discussed strategies in online/interactive today is auction-based advertising. Months ago, ADOTAS published an exclusive byline from Bill Urschel, CEO of AdECN, an auction-based exchange that aims to bring a new kind of stability and revenue-driver to the market. The article in turn created quite a stir amongst our readership, spurring ADOTAS to delve further into the topic and Urschel’s perspective.
Urschel & Co. insist that AdECN and its auction-based model represent the next breed of ad inventory models, one that boasts to be as efficient as the stock market itself. Recently, writer Stephen Bonser met with Bill Urschel in the AdECN offices in Carpinteria, California. The two shared an engaging dialogue that shed light on the background of AdECN, the company’s benefits and inner workings, and how its new approach to inventory can change the way advertising is bought and sold.
What is the mission of AdECN and what are you bringing to the market that is innovative?
AdECN is a real-time, per-impression, auction-based exchange that makes the digital advertising market as efficient as the stock market. To achieve this we have created a computer-based “ECN” or Electronic Communication Exchange, similar to the exchanges that do much of the stock trading today, and applied the concept to online advertising.
The core of the AdECN exchange is a real-time auction for every impression, in which the advertiser can use over a dozen targeting methods. Every time a viewer lands on a web page in the exchange it triggers an auction among all the interested advertisers and in less than 100 milliseconds the highest bid wins and that ad is shown. The advertiser knows what he is getting and he is paying only what it is worth to him. The publisher gets the highest price possible for each impression, and he sells more of his inventory.
A primary benefit to the market is that we create maximum liquidity. Advertisers know what they are buying, and are paying only what it is worth to them. Publishers get the highest price and sell off more of their inventory.
What needs to be improved in the way interactive advertising is bought and sold today and how does AdECN help?
In the opinion of many involved in the online ad industry, liquidity is the biggest problem of bringing true market forces to the trading of ad inventory. Every ad network, even the very best, has transitory supply and demand problems, for example, campaigns that can’t finish because they are ‘capped out’ or inventory that is going unsold because some other campaign ran out of budget.
So, ad networks go looking for someplace to run those campaigns or sell that inventory. They need liquidity, and sometimes they get it, but at too high a price, which wastes advertisers’ dollars, short-sheets publishers, and feeds middlemen who do nothing but pass along deals. A real-time trading exchange solves that liquidity problem.