One of the ways ad networks differentiate themselves from one another is by flaunting their position in the ad queue.Ã‚Â That is, their sales reps talk the network up with ad buyers by saying their network gets "first look" at an ad impression on a content website. An ad queue is a dynamic construct.Ã‚Â Think of it as a list of ads and ad redirects that, in a specific order, get a shot at serving an ad whenever someone loads a page on a site.Ã‚Â Typically, a publisher reserves the first look at an ad opportunity for ads it sells itself through its own ad sales force.Ã‚Â If the inventory is unsold through its own ad sales force, the publisher's ad server may serve up a redirect to any of several ad networks.Ã‚Â Networks often tout that they're positioned in this dynamic queue such that they get a look at an ad opportunity before their next closest competitor does.
Why is "first look" so important?Ã‚Â Well, if you're a network executing a simple behavioral targeting campaign, and you're consistently behind your competitors in the ad queue, scale can very easily and very quickly become a problem.Ã‚Â Think about it.Ã‚Â If you're Tribal Fusion and you need to serve 10 million impressions a month for Toyota to in-market car buyers, and Specific Media is consistently positioned in ad queues before you are, they're going to be able to identify more in-market car buyers than you are.Ã‚Â They'll be able to clear more media against this target than you will.Ã‚Â Thus, they'll have more inventory to sell.
Keep in mind that I said ad queues are dynamic.Ã‚Â They're constructed, for the most part, on an impression-by-impression basis.Ã‚Â Only in certain cases are they discriminatory in the way I described.Ã‚Â More likely, revenue optimizers in place on the publisher's side will serve the ad that yields the highest CPM, regardless of what network it comes from.Ã‚Â But there's nothing preventing an ad network from striking an arrangement with a publisher that gives it first look before any other network.
Of course, it's not in a publisher's financial interests to grant first look on an exclusive basis.Ã‚Â Theoretically, though, it can happen.Ã‚Â In practice, whether or not certain networks are really getting first look or it's just a load of hot air isn't easily ascertained.Ã‚Â To get a gauge on this, you'd have to build a spider or crawler that repeatedly pings content sites and maps every redirect, and even that wouldn't give you a complete picture of what's going on.
But I digress.Ã‚Â What got me thinking about this was recent industry chatter concerning tools that certain agency holding companies are building.
Mr. Klues dismissed the notion that VivaKi's creation is simply about amalgamating dollars to have more negotiating clout, saying that having scale is about more than being able to drive down the price of media. "I want a preferred relationship with media owners in terms of content opportunities and new technology opportunities. I want first-mover rights," he said.
Before I go any further with this, I want to be clear that all I'm doing is engaging in speculation.Ã‚Â I don't have enough information to know whether VivaKi is a technological breakthrough or simply the latest holding company attempt to rearrange deck chairs on the Titanic.Ã‚Â Now that we've gotten that out of the way...
It makes me very nervous to think that an agency or holding company might suddenly jump into the "first look" fray with ad sellers.Ã‚Â I'm not saying that that's what's going on here, but it makes me nervous nonetheless.
What I fear is that sellers might build ways for agencies or holding companies (and their technology tools) to effectively jump ahead in line.Ã‚Â That is, the big boys would get a look at ad opportunities dynamically and on-the-fly before smaller ad buyers would.Ã‚Â Eek.Ã‚Â That's scary.
Again, I'm not saying that this is what's going on in this case, but when an agency holding company announces that they're building tools to interface directly with Microsoft, Google, AOL and Yahoo, and one of their execs starts talking about "first-mover rights," it gets ya thinking...
When you ruminate on it some more, the notion of pre-emptively locking in first look with big publishers could lead to an arms race.Ã‚Â It could also lead to some new thinking about what constitutes a monopoly or an anti-competitive practice in our industry.Ã‚Â At the very least, the notion of a holding company or big agency getting a technologically-aided leg up on competitors would be analogous to many of the things that concert-goers hate about TicketMaster.
That is, have you ever tried to dial-in or log on to TicketMaster to get a shot at tickets for your favorite band, only to find out that the best seats in the house have already been given away to VIPs, radio stations and corporations?
Now picture that you're a media buyer who needs to purchase several million impressions against Moms with Kids or Outdoor Sports Enthusiasts, and knowing that a bigger agency automatically gets to look at those audiences before you do, and they may pre-empt you, possibly by locking up the inventory you want at a lower price than you were willing to pay for it.Ã‚Â That's the part that scares me.
I'm not saying that this is happening right now.Ã‚Â Clearly it's not.Ã‚Â But the technology tools and the revenue motives exist today.
Could it happen?Ã‚Â Well, an ad queue can, in practice, only be so long before it hangs up page requests pretty consistently.Ã‚Â So there's a hard limit to the number of entities that can get preferential positioning.Ã‚Â So there's potentially a scarcity situation created around a known and limited commodity.
On the other hand, it makes more sense for publishers to use revenue optimizers, and simply serve the ad to whichever entity is willing to pay more for it.
Or does it?
What if a bidding war were started, with the Big Four (Platform-A, Microsoft, Google, Yahoo) on one side and the major holding companies (Publicis, Omnicom, WPP, Interpublic, etc.) on the other.Ã‚Â Start the bidding over "first look" position such that one agency holding company could consistently get a crack at ad opportunities before the rest.
On one hand, it's not exactly consistent with the Internet's tendency to disintermediate.Ã‚Â (I'd call this "intermediation" - or the insertion of a middleman into the process.)
On the other, what if the Big Four were able to auction off "first look" and add several tens or hundreds of millions to their bottom line before any ads are sold?
I realize what I'm describing here is far-fetched, potentially anti-competitive in nature and a little counter-intuitive.Ã‚Â But I've seen crazier things fly.
What do you think?