I’ve been helping my friend Stephanie on this story for a few weeks now and finally, it came to light. I’m stoked for her [Stephanie] to really break one of the first stories that really disrupt the advertising industry in the past few years, as well, as highlight a friends of mine including Joe Zawadzki (MediaMath) and Zach Weinberg (Invite Media).
I’d like to take the time to expand upon my quotes:
“The exchanges are just a platform to buy and sell media, but you have to layer the measurement and data on top, which could come from different areas: some agencies will build it, some agencies will partner,” said Darren Herman, head of digital media at the Media Kitchen agency.
“We use the analogy of, anybody can trade on the financial markets, anyone can get an eTrade account, but it’s how you’re smart about how you use your eTrade account that determines how well you’re going to do trading,” Mr. Herman said.
In the first paragraph, I mention that exchanges are ‘dumb.’ They essentially are a large pool of available impressions that ultimately lead back to a website (sometimes blind, other times transparent) and potentially back to a certain user. What I’m stating in the paragraph is that if you match data about a user/audience and overlay that ontop of an impression, it becomes very powerful. Media agencies, who are buying the bulk of media on behalf of their clients will need to adapt in this new area and it’s going to take a certain type of group/unit/team/company to make this happen due to the parallels it draws from the financial markets with analysts, yield managers, traders, etc.
In the second paragraph, I’m simply stating that with today’s financial markets, anyone can trade. You, my grandmother, my buddy, my brother, or my wife can get an eTrade/Zecco/etc account and trade on the markets. Just because you have access to the markets does not guarantee success; it ultimately comes down to the data you have on the instrument (in this case a security) and the market conditions.
Zach has a quote towards the end of the article that I want to highlight as this should spur potentially a dozen new businesses popping up.
“Once there’s a market place where you can buy and sell using your own technology, you can absolutely create financial instruments or media instruments,” said Zachary Weinberg, the chief executive of Invite Media, a start- up in Philadelphia that is working on ad-exchange strategies. “I think what you’ll see is traders come in, and they’ll look to create derivatives on certain packages of media, and resell them to other guys. You’ll see a whole marketplace develop because of this technology shift.”
I’m super excited about this industry, are you?