I have issue with the process of online media buying. Agreeing a spend budget for the month, researching a handful of websites, a few phone calls to negotiate the rate, booking a volume of impressions, signing an insertion order before sending over the ad-serving tags.

It feels too rigid, too simplistic, but most of all too much like offline media buying! But is that all about to change?

In comparison, paid search engine marketing is a much more fluid process, where spend is constantly reviewed, keyword lists re-evaluated, ad copy tweaked, all to maximise the Return on Investment.

It’s a daily, if not hourly, process which ensures the paid search campaign is effective as possible.

As a result, the last few years has seen an array of search engine marketing agencies appear from nowhere, winning multi-national brands, recruiting hundreds of employees and making millions of pounds in the process.

Who would have even thought such thing as a search engine marketing agency would have existed just 10 years ago?

In addition, in the desire for constant optimisation, various companies have also developed keyword management tools with clever algorithms, allowing for campaign parameters (spend, position, traffic, ROI) to be defined to deliver the best performance.

But despite a huge growth in spend over recent years, online media buying, by which I specifically mean display, has remained relatively unchanged.

Yes, there have been some advances in targeting and optimisation.

Demographic targeting, creative optimisation and re-targeting all help improve performance, but the process of media selection, purchase and delivery is the same as it was 10 years ago.

However, a number of companies have recently been developing complex systems that allow for the amalgamation of a mass array of online media into a dynamic trading space where impressions can be bought and sold.

These have become known as advertising exchanges.

While online trading platforms are nothing new, arguably pioneered by eBay, recent developments are going to lead to a major step change in the media buying process.

Instead of agreeing to purchase a set bulk volume of impressions from a media owner, advertising exchanges will allow for the purchase of media on an impression-by-impression basis.

Instead of negotiating the rate with a sales person over the phone, advertising exchanges will see dynamic trading with auction style bidding for each impression.

Instead of booking a monthly media plan and hoping for the best, advertising exchanges will allow for the constant optimisation, switching of budgets, improving campaign performance.

Instead of selecting media based on the websites perceived audience or broad demographics, advertising exchanges will allow for targeting based on behaviour of an individual user.

And once each impression has been selected, bid and won, the creative will be dynamically fed from the ad-server over to the media owner.

All this will happen in a hundredth of a second.

So what is the challenge for the media agencies?

Well, firstly the whole team structure of planners, buyers and traffickers will become irrelevant.

Instead agencies will require analysts and stock brokers to understand campaign performance and make the best trades.

Secondly, budget planning will need change.

No longer will the agency agree a set budget with the client each month, by which the agency then put together media plan for sign-off.

Media agencies will be constantly optimising and trading based upon realtime campaign performance.

Finally, it will change the industry into a science rather than an art.

Realtime metrics, algorithms, results will influence every decision and far less on the gut instinct and previous expereince of a media planner.

In many ways online media buying will become very like search engine marketing and personally, as an online advertiser, I don’t see that as a bad think.

I think we are finally beginning to see the sort of advertising opportunities the internet promised back in the late 90s. Highly targeted, accountable, effective advertising.

The New Media stock exchange has arrived.

Matthew Finch’s Blog