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  Yahoo Rebrands Its Right Media Exchange As A "Premium Exchange"
Reported by Business Insider on Monday, 16 November 2009 (on November 16, 2009)
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NEW YORK (AdAge.com) -- Yahoo's latest brand overhaul? Taking its ad exchange up market.
Today the online portal will start to reposition Right Media Exchange to agencies and ad networks as a "premium exchange" in the hope that major advertisers will feel safe buying inventory. At the same time, it will try to shed a reputation that the trading platform is full of ad networks that are just dealing inventory back and forth in an arbitrage model.
The move is meant to capitalize on the new big-agency dollars moving into exchanges and improve the inventory and transparency in a marketplace that critics say has been that it's overrun with no-name ad networks and pools of inventory that buyers don't know enough about.
To make its move, Yahoo will start luring online publishers, such as Ziff Davis, to the exchange and kicking off any ad networks that aren't adding value in the form of overlaying data or advanced targeting.
"It's us making a statement: We're the oldest, largest ad exchange and it's time for us to go through a maturation stage where we go up market," said Bill Wise, senior VP-platforms at Yahoo. He thinks Right Media -- and the ad-exchange space, generally -- will transition much in the same way one of the web's earlier, auction-based marketplaces did: At first eBay used to sell whatever was sitting unused in people's basements, but today it's increasingly being used to sell major goods, such as cars or Pottery Barn furniture.
But instead of brokering vintage blenders or wingback chairs, an ad exchange deals in ad impressions. On one end of the market, publishers, ad networks and portals plug in their available inventory and on the other end the buyers, who are increasingly agencies and marketers (vs. other ad networks looking for cheap inventory), plug in the targeting information -- demographic, psychographic or behavioral -- and the price. Like in the search marketplace, an auction takes place to determine the winner.
New attention on exchanges Agencies are focusing more attention on exchanges because they don't want to miss out on a burgeoning market, like when they initially missed out on search. It also allows marketers to be more precise in their targeting. Marketers for decades have used content as proxy for audiences -- soap operas, for example, represent 18- to 49-year-old women. "What an exchange does is let marketers go out and buy the exact audience they want," Mr. Wise said.
"Conceptually a lot of what we're doing is putting the techniques of search buying into the display world, with technology at the center and some sort of campaign and bid-management rules that directs transactions and optimizes the buys," said Matt Spiegel, CEO of Omnicom Media Group Digital. "To the extent an exchange can get me the stuff that people like me are likely to buy -- and provide service that helps me buy that -- great."
Yahoo wants some of that money and needs to assure the big buyers that its inventory is higher quality.
"Two years ago, [those buyers] didn't want to touch the exchange," Mr. Wise said. "And now they do. But if we don't evolve our exchange, then we'll lose that opportunity."
But Yahoo's move is also one of lead preservation. While the new world of display advertising looks a lot like search, there's one glaring exception: Google is the underdog and it's Yahoo's lead to lose.
Yahoo was the first big seller to get into exchanges, having bought Right Media, the oldest and largest ad exchange, in 2007. Not surprisingly, Yahoo's Right Media purchase was followed by an influx of VC money backing new exchanges, which are fast, efficient and trade in real time. More recently, Google introduced a revamped exchange that has access to all of its AdSense inventory as well as, potentially, DoubleClick clients. The DoubleClick AdExchange is a rebuild of DoubleClick's old exchange using Google's technology and the first big product launch out of the search giant's $3.1 billion acquisition of the company, completed in 2008.
"They're getting lapped a bit as everyone's moving to real-time bidding," said Mark Mannino, VP-supply and data at Media Math, which is a buying tool that has its own clients and is often licensed by agencies. "It's easier for these small companies to build anew -- that's the innovator's dilemma -- and Google's coming in with AdWords, which is theoretically huge in size and it's fully transparent, meaning I can pick each site I want to appear on."
To bring it up to par with its newer competitors, Right Media is beta testing real-time bidding, said Mr. Wise, and it's requiring all networks on the revamped exchange to share at least partial lists of which sites they work with.
Regardless of the changes, it's been hard to ignore Right Media because it offers so much Yahoo inventory. The portal is the exchange's biggest client and 100% of Yahoo's non-guaranteed business (inventory that's not pre-sold against a specific time and target to clients) is on the exchange, said Mr. Wise, who considers the Yahoo inventory to be a model of the "premium" impressions he's emphasizing on the exchange.
"At end of day, we want to work with more companies that look and feel like Yahoo," he said.Join the conversation about this story »See Also:Ãœber-Programmer Ditches Yahoo Over 'Lame' Microsoft DealYahoo Faces Major Headwinds As It Tries To Rebuild Its Display BusinessAbort! Yahoo Must Drop The New Building Plans Immediately! (YHOO)
Links: Full news story
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