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Going private to go forward

Over the past few months, Nexage has held a series of industry roundtables in San Francisco, New York, and London. These have brought together publishers, buyers, agencies, trading desks, and advertisers to discuss how best to make mobile advertising a growth engine for their respective businesses.

Todd Tran: managing director for Europe at Nexage

Todd Tran: managing director for Europe at Nexage

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We often level-set the discussion with analytics from the advertising market; analytics that are both expected and jarring. For example, that mobile has become the consumers’ primary screen and will soon become the majority digital channel.

As the new digital reality, it’s essential that industry players put initial mobile strategies in place. Whether that’s the publisher’s monetization strategy to run integrated direct and indirect channels while supporting and protecting their brand—or the advertiser’s strategy on how to reach and engage premium audience at scale.

These roundtables inevitably turn to how best to exploit different programmatic markets to execute against these strategies on the Nexage Exchange.

Before going into specifics, let’s take a step back and look at the types of programmatic markets that are available for premium publishers and brands:

  1. Open exchanges are public markets composed of buyers and sellers that transact, primarily through real-time auctions.
  2. Publishers can create private exchanges open only to select buyers and with specific rules (e.g., pricing, brand safety, ad placement); buyers benefit from a first or exclusive look at high-value inventory from that publisher.
  3. Publishers and agencies/trading desks can join together to create programmatic direct markets where they develop counter-party commitments and rules to execute an exclusive (one-to-one) market.

The upside of the open exchange is scale and liquidity; the upside of private exchanges and programmatic direct markets is the ability to gain incremental liquidity while determining exactly how market participants will buy or sell.

To put some numbers on it: programmatic markets will support more than 50% of advertising spend by the end of 2015 led by the growth of private exchanges and programmatic direct. Today, private exchanges represent more than 25% of spend on the Nexage Exchange.

Many premium publishers, agencies, trading desks and advertisers are just now accelerating their mobile ad business in response to the massive consumer shift to mobile. Some of the players want to grow their businesses with more controls in place as they come up to speed on the differences between mobile and their legacy online businesses. As you can imagine, many sellers and buyers are expressing a high interest in private exchanges and programmatic direct.

The good news is that private exchanges are performing extremely well and, in some cases, are going beyond providing "incremental liquidity" and are fully fuelling growth. It’s still early for programmatic direct in the mobile market, but Nexage is already pioneering these approaches with select premium publishers and trading desks.

It’s clear that publishers, agencies, trading desks and advertisers are adapting to the new reality by putting mobile-specific strategies in place. It’s even more apparent that private exchanges and programmatic direct markets are critical instruments to fuel growth for both buyers and sellers.

Todd Tran is managing director for Europe at Nexage

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