Ad Exchanges Attempt To Gain Traction, But For Most Marketers, The Model Remains An Experiment

Within the past week, two new online ad exchanges have ramped up efforts to offer web publishers and advertisers an alternative to the dominant players, namely Yahoo’s (NSDQ: YHOO) Right Media and Google’s (NSDQ: GOOG) AdSense. A Mediaweek piece offers a snapshot of the ad model’s potential and the challenges the two upstarts face. While both ContextWeb’s Adsdaq and Traffiq have attracted some big name publishers and have been working to differentiate themselves from their more established rivals, there’s a number of hurdles. For one thing, Alan Pearlstein, the founder of interactive ad shop Flying Point Media, tells Mediaweek that marketers are looking to create unique web campaigns, rather than the “commoditized” approach to ad buys, which is all about getting the lowest cost price in real time auctions of single impressions. Furthermore, large advertisers still tend to prefer hands-on negotiation with media outlets, as opposed to an automated placement.
Still, for big name websites, even the small amount of ad dollars received from partnering with ad exchanges could eventually add up, making the experiment somewhat more advantageous. Traffiq, which claims to have signed up 350 sites (including, and, calls its main selling point “hypertransparency.” As opposed to commoditizing single impressions done by most other online exchanges, New York-based Traffiq, in beta since July, says it focuses on buying and selling discrete blocks of inventory with defined start and end dates.
As for Adsdaq, which says it signed up 94 clients over the summer (including Sports Illustrated, A&E, Nielsen Digital), the company is trying to promote its customer service and targeting abilities against AdSense. It says it can offer “real time page-level scans,” while Google’s system offers only periodic updates of pages. Secondly, it says that it offers graphical, rich media and text while AdSense only offers text. And in a less technical contrast, Adsdaq has toll-free customer service reps manning the phones; Google does not.
Despite the various features, ad exchanges are still considered experimental by many marketers, who are mainly using the systems for small tests. Summing up the current state of the ad exchanges, Roger Barnette, president of search ad technology provider SearchIgnite, tells Mediaweek that nobody has figured out the exact model just yet.