Making the case for private advertising exchanges for online video


Open, automated advertisement buying markets seem to make sense. After all, who could disagree with the goal of increased efficiencies and lower costs?

However, online video, especially premium sports content that premium advertisers love to associate with, has long been undervalued in the marketplace due to real-time bidding and open exchange ad networks.

In my opinion, premium video content needs to be differentiated from the deluge of online content currently available, and the best way to do this is through private closed exchanges.

Recently, some heavyweights in media investment management have signaled a shift away from open ad exchanges toward the private market in an effort to avoid fraudulent views and leverage volume discounts for its brands.

That’s good news, but only if the motivation is in line with what I see as the chronic undervaluing in the open exchange of premium sports content.

Take Major League Baseball’s World Series, as an example. It’s the kind of high-definition, professionally produced content with massive global audience reach that advertisers crave.

This video content demands careful placement and distribution coupled with a sales force that understands and sells its value. The value is in the premium content, quality, and audience that a private exchange delivers.

However it’s important to make clear that an argument for private exchanges is not an argument against efficiency-improving technology. SendtoNews’ private, closed network includes a programmatic back end to automate each and every buy, and our goal is to move toward more automation.

But part of this evolution includes education, an effort to inform the market that premium content has a premium value to it. Call it the human element. A direct sales force, backed by a programmatic or automated back end that reinforces the team’s market message, is the only way to raise the value bar.

In such an exchange, media buyers pay the same for a programmatic offering as they would for a direct sales rep offering. A programmatic back end creates valuable efficiencies when it comes to buying into a private exchange or network of premium content.

Another obvious benefit of a private, closed exchange is the ability to offer a more tightly controlled environment with greater oversight and transparency. For buyers and advertisers, it’s much easier to avoid fraudulent views because a closed network can be more carefully scrutinised by the agencies doing the buying rather than the controls set in place by an open exchange or ad network.

Sure, big buyers can expect volume discounts in a private exchange, however only if an appropriate price is established for the content and the audience it’s being bought against.

Premium video content accesses a premium audience. Advertisers know it. Content providers know it.

A private ad network, with a human sales force, can sell this content at the premium price it deserves while still offering the automation efficiencies of programmatic.

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