Ad:tech New York panel questions the demise of the upfront

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NEW YORK - Ad exchange models are the topic of much speculation as companies like Yahoo, eBay and Google invest in more transparent models of exchanging online, television and print ads.

"The Move to Auction-based Media and the Demise of the Upfront" panel at ad:tech New York had five representatives from companies using the exchange discuss the implications and projected growth of the auction-based model.

"We're starting to learn and understand how best to match buyers with the correct type of inventory," said Todd Teresi, vice president of sales operations at Yahoo Inc. "Over time, it remains to be seen where this will go. Don't hold your breath that in the next week you're going to see the Yahoo front page in the exchange."

Mr. Teresi represents Yahoo in the wake of the online media giant purchasing 20 percent of the Right Media exchange, a platform it currently uses to sell some but not all its online ad inventory.

He was joined by AdBrite CEO Iggy Fanlo and AdECN CEO William Urschel, two other online ad exchange representatives.

Also on the panel was Howard Rosenburg, director of private marketplaces at eBay, whose company recently launched a platform that auctions 30-second spots for national cable networks. And then there was Mochila  CEO Keith McAllister, whose company sells content to publishers and who recently launched adMatch, a program that provides free ad-supported content in order for advertisers and publishers to share revenue.

All the exchange platforms are designed to add value to both sides of the transaction, one of the panelists said.

"I don't think that a media marketplace that doesn't work for all constituents can succeed," Mr. Rosenburg said.

He said eBay's platform would not, as the title of the panel suggested, kill the upfront ad selling process. Instead, the two buying models would work in concert, with an auction exchange adding more reach and flexibility to the already existing process.

To this point, moving all ad inventory to an exchange model, may not be a good solution for the largest publishers.

"Whenever you make things more transparent you essentially devalue brands," Mr. Fanlo said. "Brands are really just a substitute for lack of information."

He said advertisers buy what they are familiar with and what they know will work. Essentially this drives the cost of big-branded publishers, leaving the little guys on the Long Tail to be potentially devalued or sold as remnant.

"There's no such thing as remnant inventory," Mr. Urschel said. "It's just improperly priced inventory."

Mr. Fanlo also spoke to the importance of basing an ad on a demographic watching the content rather than on the content itself.

"If I'm watching the NFL on Sundays and if they sold me in context they'd just have ads for Nike cleats," Mr. Fanlo said. "But they are selling me beer, trucks and erectile dysfunction drugs 'cause they know I'm a fat old man."

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