Technorati Media's partnership with AppNexus to create a private ad exchange is the latest in a series of such ventures, giving momentum to this concept.
Over the past several months, traditional media companies, including NBCUniversal, CBS and IDG introduced their own private exchanges, Adweek notes. The point is to monetize excess display inventory without putting at risk either their price points or data, as sometimes happens with large exchanges. Advertisers, for their part, are looking for venues through which they can place ads next to quality content.
So far, for publishers, the move seems to be a smart one. For starters they are making higher CPMs via their own exchanges, Michael Greene, an analyst at Forrester Research, told the New York Times. In fact, he said, publishers can increase CPMs of such ads from about $1 to $5 when they move to a private network.
IDG TechNetwork launched Tech Media Exchange earlier this year, a tech vertical exchange with advanced data targeting capabilities and agency trading desk participation on an invitation-only basis. It is powered by AdMeld 's private exchange technology.
AdMeld is also partnering with quadrantONE, a joint venture of the Tribune Co., Gannett, Hearst and The New York Times Co. to launch Q-Exchange. This ad exchange’s focus is on premium local audiences. AdMeld is also running the Weather Channel’s Category 5 platform, one of the industry’s first private exchanges to launch.
RTB Test
Central to all of these platforms - including Technorati’s and AppNexus venture - is real-time bidding technology.
An emerging technology that has been much-hyped by its proponents, real-time bidding is expected to fuel a significant portion of targeted ads within the medium term even though only a small percentage of ads are sold this way right now.
AdSafe recently observed that premium brand advertisers appear to be shifting a larger percentage of their display adverting spending to ad-exchanges, real-time-bidding platforms and demand side platforms - advertisers that had previously acquired media primarily through direct publisher sales.
Also RTB offers an excellent ROI story. Improve Digital co-founder and COO Janneke Niessen cites research by Turn that shows click-through rates improving by up to 135%, conversion rates up 150% and cost per action up 145% when compared to non-real- time inventory. (via New Media Age).
Other data she points to is provided by comScore, which reported a 106% increase in overall CPM over six months by using real-time bidding. And Forrester Consulting found that an insurance company decreased its online cost per lead from $200 to $100. Other data she points to is provided by comScore, which reported a 106% increase in overall CPM over six months by using real-time bidding. And Forrester Consulting found that an insurance company decreased its online cost per lead from $200 to $100.
