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Brian O’Kelley, Co-founder and CEO, AppNexus
Real-time bidding (RTB) is an exciting new technology which we see growing, with average daily impressions in the UK 34,968% higher than they were a year ago. 2009 was the year of adoption. In January of that year, we saw only a few million ads sold daily on an RTB basis around the world, but by the end of the year we were already seeing a billion ads in a day. 2010 was a watershed year. I've never seen a new technology adopted faster than RTB. Over the course of a year, we went from seeing about a billion ads a day to over 8bn. In 2011, RTB is a commonly accepted monetisation channel.
We've seen a variety of online ad networks innovate in this space. These networks play a critical role in delivering monumentally effective advertising and are the biggest users of the online ad exchanges and their revolutionary auction-based marketplaces.
However, in some areas there has been criticism in the market, based on the assumption that ad networks make high margins. Why is this bad? Why focus on margins if there's measurable performance return on investment? Surely what matters most is that advertisers see results that justify the margin they're paying.
Speaking as a long-time disciple of online advertising, my interest is in seeing the most vibrant display ecosystem possible, one that's driven by new ideas and technology, and where the businesses that provide advertiser value receive the margins and profits they've earned. And from my vantage point, ad networks are innovating at a tremendous pace and bringing to market some of today's best solutions for driving return on investment for advertisers. Why shouldn't Advertising.com recoup its massive investment in developing proprietary algorithms, or MediaIQ for its advanced analytics?
So let's concentrate on whether or not companies are delivering advertiser ROI. If they're not delivering value, their margins will go away on their own. Let's give ad networks credit for the results they provide, and let's reward innovators with healthy margins as compensation for their effort and risk. My advice to any agency that's focusing on how to disintermediate a third party other than solely on producing superior results is simply to review what really matters to you and concentrate on helping your clients achieve their objectives. Let's celebrate the valuable innovations that sophisticated ad networks are bringing to our industry, and focus on capitalising on the opportunities they're creating, rather than their well-earned margins.