Publishers of the Digital Advertising inventory have been complaining about the opacity of prices within the RTB for quite a while. On the surface, second price auction rule within the Ad exchanges does favor the buyers because in most cases buyers end up paying much less than their willingness to pay (WTP).
For the second price auction to work effectively, there needs to be competition in the market from both supply and demand side. There is definitely a surplus ad inventory available, but the demand is actually low. The demand side platforms (DSPs) aggravate this problem for publishers by aggregating the demand; reducing the demand competition even further.
A recent article in ad exchanger talks about this tilted market, and suggests some ways which can bring transparency into the market place. The jist of the article is to have a transparent market where every participant can see the buy / sell price of the inventory and can then bid accordingly. There are private ad exchanges which work on this same principle but this market information doesn't pass over from private to open exchanges.
To fix this information parity issue in open exchanges, the incentives needs to be re-deigned for the buyers and the sellers.
For the second price auction to work effectively, there needs to be competition in the market from both supply and demand side. There is definitely a surplus ad inventory available, but the demand is actually low. The demand side platforms (DSPs) aggravate this problem for publishers by aggregating the demand; reducing the demand competition even further.
A recent article in ad exchanger talks about this tilted market, and suggests some ways which can bring transparency into the market place. The jist of the article is to have a transparent market where every participant can see the buy / sell price of the inventory and can then bid accordingly. There are private ad exchanges which work on this same principle but this market information doesn't pass over from private to open exchanges.
To fix this information parity issue in open exchanges, the incentives needs to be re-deigned for the buyers and the sellers.
No comments:
Post a Comment