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Google has unveiled its highly anticipated ad exchange to agencies and publishers as it readies to become a dominant player in the nascent market.
Ad exchanges – online marketplaces where buyers and sellers trade ad inventory – are tipped to be the next big growth area in the digital market, forecast to exceed £50m in revenues in the UK this year.
Google CEO Eric Schmidt has said its ad exchange is the next major source of revenue and called it “the next big one” for the search giant.
Google UK last week unveiled major parts of its ad exchange to key agencies and publishers, including Associated Northcliffe Digital, BBC Worldwide, Guardian News & Media and Opera.
Google’s exchange will be a revamped version of the DoubleClick exchange following the search giant’s acquisition of the ad serving company in May 2007.
new media age understands the exchange will launch in two parts under the Google Ad Exchange 2.0 or AdX 2.0 umbrella. Spot Exchange will launch first and take real-time, non-guaranteed inventory — “a clearing market for remnant inventory”, according to an agency source. The second part, In Future, is in development and will allow buyers to reserve blocks of inventory rather than purchasing in real time.
The model plans to have better targeting and reporting facilities, with publishers able to categorise their sites. Google’s page-reading technology will be used to confirm categories are correct.
new media age also understands agencies will be able to bring existing audience data to the exchange so they can target specific groups.
The 45 buyers and sellers on the current version of the exchange will be the first to test the new exchange before it fully launches in September.
Google plans to take a 20% cut of publishers’ earnings via the exchange.
One agency head who attended the Google demonstration said advertisers and agencies would benefit from its exchange because “it’s not costing them anything to get involved as the publishers pay”.
The model has been met by enthusiasm from agencies and publishers, which said the exchange would improve the effectiveness of trading and dealing.
Richard Parboo, head of online sales at ITV, said Google was certain to gain a strong hold on the market. “I can see us using it for Friends Reunited and it would benefit other social networks that have lots of page impressions,” he said.
Digital agency network Isobar is putting together a roadmap of how the agency wants to work with ad exchanges in the future. Group trading director Alex Randall said it was important that other players move quickly. “Getting in early is important,” he said.
Rival ad exchange Right Media, owned by Yahoo, welcomed Google’s move into the market. Roger Williams, director of international marketing, said, “It’s not a case of the market being mature; it’s a growing developing market. Hopefully it will drive growth of ad exchanges.”
Zuzanna Gierlinska, head of Microsoft Media Network at Microsoft Advertising, said the company was currently trialling its exchange AdECN in the US. “We haven’t confirmed how we’ll take it to market and it’s going to be at least a couple of years,” she said. “We see exchanges as an evolution of networks as more inventory is available online. There will be more exchanges in the future.”
AOL/Platform-A has a US ad exchange called Bid Place, which lets advertisers bid for ads on AOL and across selected partner sites. An AOL spokesman said there were no planned changes to its offering.
A Google spokesman, said, “We’re always looking at new ways for advertisers and agencies to engage with our users, but we have nothing new to announce at this time.”