Comments on: Ad Network Platforms vs. Demand Platforms

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By: sahilg

sahilg — Mon, 26 Oct 2009 22:45:25 +0000

Great read. Sometimes it seems like a real CF, so I appreciate your wide angle perspective.

The Ad Network landscape is fairly balkanized. Is it inevitable that the same fate awaits DSP's? Is that necessarily a bad outcome for DSPs? If not why and how can it be avoided?

When we talk about adding value, what do think the smart ad networks and DSP's need to do together so that 1+1=3

Where do you see ad optimizers. Are they considered an ad network in your worldview?

By: dherman76

dherman76 — Sat, 17 Oct 2009 03:12:52 +0000

I think there are very few agencies who can build the technology. While we can all write checks, I do not think that many people want to own the technology at this point up and down the entire value chain. There are certainly parts of the value chain we do want to own and we're building that capability out. As for the hardcore tech portion – I'd agree that most holding co.'s not only won't succeed building the tech but do not have the right type of management in place to understand how to run a tech company.

By: dherman76

dherman76 — Sat, 17 Oct 2009 03:11:11 +0000

Richard, thanks for dropping by. Great comments. I can't speak for all agency platforms, but the ones that we are building the capability for is fairly open – we want to plug into as much as possible in order to have access to as much data and media as possible.

It's all about value creation.

By: maxkalehoff

maxkalehoff — Fri, 16 Oct 2009 19:48:20 +0000

A big question for me is whether agencies will succeed in building technology that can scale across diverse client needs. Historically, agencies have had a difficult time building technology and making it scale like a product. In fact, many advertising-technology initiatives retreated into agencies when they failed as scalable products — we've seen that happen a lot in the SEM space.

By: Richard Frankel

Richard Frankel — Fri, 16 Oct 2009 19:38:30 +0000

Good discussion, as always, Darren.

As I see it, the real differentiator in the marketplace will be value creation. It's not about ad networks vs. demand platforms. It's about which players (whether they are ad networks, platforms, ad agencies, publishers, etc.) can create more value. This can be done in a lot of different ways -- technology, people, process, great ideas.

As agencies start to build tools that aggregate demand on top of the efficient supply mechanisms, they will still need to stay competitive by taking advantage of whatever value-creation mechanisms exist in the ecosystem. The business models of these companies don't really matter, what does matter is who creates value.

One of the biggest barriers -- and opportunities -- as the environment develops is that every player will be running a closed garden. The agency platforms you mentioned are by nature closed, ad networks are closed, portals are closed, publishers are closed. The exchanges are closest to being truly open, but they all have their own limitations and business model drivers that lead them to block off data.

Fundamentally all the different kinds of structures -- as long as they create value -- can exist. Look at financial markets. It's not a great analogy but it's helpful. The stock markets are kind of open, but there is a huge diversity of valuable organizations (trading houses, mutual funds, hedge funds, brokers, day traders, etc. etc.) that co-exist in the marketplace on top of the markets. I see the display space being potentially as vibrant.

By: dherman76

dherman76 — Fri, 16 Oct 2009 13:27:00 +0000

In some cases, it is being adopted in markets such as Europe and Asia. Our friends over at Havas have been live oversees for some time now.

I would say the market is most technologically sophisticated here in the US however as of right now.

By: dherman76

dherman76 — Fri, 16 Oct 2009 13:25:59 +0000

Pete, thanks for stopping bye. Great comments. Would love to engage in an offline conversation.

By: dherman76

dherman76 — Thu, 15 Oct 2009 13:12:11 +0000

Thanks Michael – appreciate the comments. It's amazing how much attention it gets, but I guess since most of the platforms are being adopted by big agency holding companies that are public entities, they get alot of attention because of the markets.

By: jassimali

jassimali — Thu, 15 Oct 2009 07:08:06 +0000

Darren,

Great breakdown of an increasingly complex and ever evolving side of the industry ……

Do you see this trend being adopted in other markets such as europe and asia soon enough where the ad inventory trading platforms are atleast a generation behind ?