ADOTAS – The just introduced Category 5, a private cross-platform ad exchange developed by revenue optimizer AdMeld, allows the The Weather Channel to identify, package and market the 50 million consumers roaming ‘cross its sites monthly as audience segments.
Could this be a new trend of private exchanges owned and operated by premium publishers? I put that question to AdMeld CEO Michael Barrett, as well as other queries regarding the workings of the private ad exchange and its place in the ecosystem.
ADOTAS: What’s so private about this Category 5 exchange? What’s it got to hide? It’s acting pretty guilty by being so secretive.
BARRETT: Secretive? Hardly! In fact, one of the big benefits of the private exchange model is transparency. This about creating a platform in which a large premium publisher, in this case The Weather Channel, can give advertisers easy access to their 50 million unique users while maintaining complete visibility and control over how each impression is sold.
The technology enables TWC to capture new budgets as advertisers shift to programmatic buying. One of the ways it does this is by helping them identify, package, and sell the most valuable audience segments across their web and mobile properties.
How does the private ad exchange improve on AdMeld’s other offerings?
The private exchange builds on AdMeld’s core technologies while layering on a series of deeper controls and analytics built for an elite class of publishers. We’ve always focused on large publishers but this is really designed for the biggest of the big—those publishers whose opportunities and challenges are unique because of their remarkable scale and brand equity.
Why the Weather Channel? Which party had the initial idea of the private exchange?
Mike Kelly, the CEO of The Weather Channel, and I have spoken about the concept of the private exchange for some time. Mike is a visionary executive who (along with his team) really understands where the space is going. In my view, the reason why this is significant is that it’s the first example of a large, premium publisher adopting this model on a cross-platform basis.
How will you judge if Category 5 is a success?
Our goal for TWC, and all our clients, is to maximize their revenue while enforcing their business rules.
Are you working with other large publishers to introduce private exchanges?
What are the biggest benefits to a publisher owning and running a private exchange?
Simply put, the private exchange enables a premium publisher to operate “above the fray” by engaging with a select pool of programmatic buyers in exactly the way they want. It also provides them with a level of transparency and data they can leverage to analyze demand trends, appropriately price inventory and sell their audience more effectively across channels and platforms.
How do advertisers best take advantage of a private exchange?
Because the private exchange is built on AdMeld’s technology, it’s already connected to every major buyer, including Omnicom and Vivaki.
How will private exchange revenue stack up against direct sales?
The Weather Channel’s direct sales team continues to offer advertisers the best premium opportunities as always. What Category 5 represents is an additional digital sales channel through which the company can meet the needs of its advertisers.
Why have premium publishers become more interested in optimizing their inventory and selling audience?
In any market, the savviest sellers are always looking to maximize their revenues, and a very effective way of doing that is by selling the way buyers are buying. As buy side technology has evolved, it’s only natural that the sell side seeks to move forward as well. In our view, this kind of back and forth makes for a healthier, more sustainable marketplace.
Do you believe having owned and operated private exchanges will become common practice for major publishers?
Yes. To the extent that major publishers want more revenue and more control over their inventory we expect to see more interest in private exchanges.
How big does a publisher need to be to warrant such an undertaking?
The private exchange definitely isn’t right for every publisher. It’s best suited for brands with the scale and market power of those in the comScore top 100.
Do you believe private exchanges could cut into or actually replace the business of another entity in the display space, such as ad networks?
Given the size and diversity of the market – and the pace of change – it’s hard at this point to imagine that there will be one approach so dominant that it knocks out a whole category. Networks are evolving along with the rest of the industry, and those that continue to add value will persist.
Will media buyers forgo intermediaries to get right to the publisher’s wares?
To the extent that a publisher’s wares are desirable and not available through intermediaries it is likely that buyers will be willing to accept the private exchange model. But there has to be value for all parties for this to work.
Could private exchanges be viewed as another intermediary in an already-clogged space?
I don’t think so. If anything, the private exchange is a technology layer used by publishers to simplify how buyers reach their inventory.