While exchange-based media buys are still only a fraction of the total media volume processed by big agencies, they are the fastest-growing segment of Madison Avenue’s media economy, and the
most recent data suggests they are beginning to impact the advertising budgets allocated to other options -- especially online advertising networks. The shift to hyper-efficient exchange-based buys
may also be contributing to an overall slowdown in the overall expansion of the online display advertising marketplace.
Looking at data compiled from the actual media buys processed by four
of Madison Avenue’s biggest agency holding companies -- Aegis, Havas, Interpublic and Publicis -- Standard Media Index (SMI) found that use of exchanges is soaring, up 58% in July and 38%
through the first seven months of the year vs. the same periods a year ago.
During the same period, spending on online ad networks declined 17% in July and 58% during the first seven
months, suggesting some kind of share shift is occurring in the way agenicies, and/or their trading desks, approach the so-called secondary display advertising marketplace.
“We think
that’s what’s happening at a transaction level,” explains SMI’s Kristina Luland, adding: “We are seeing more and more spend in the booking system under the agency DSP, so
we consider that an ad exchange.”
Luland says some of that spending may still be going to ad networks, but indirectly via inventory purchased programmatically through
exchanges.”
While still a relatively small share of total spending by the agencies, exchange-based buys now represent 5.3% of total digital ad dollars spent by the four agency holding
companies. That’s been trending upward. The share of digital ad spending bought through exchanges was 4.7% on a year-to-date basis.
The share of digital bought through ad networks has
declined to 3.0% in July and 3.1% year-to-date.
Big Agency Ad Spending: July & 1st 7 Months (Vs. Year Ago)
|
July | Jan. - July |
Exchanges | +58% | +38% |
Ad Networks | -17% | -58% |
Total
Display | +15% | +43% |
Total Digital | +13% | +23% |
Total Media | +2% | +9% |
Source: Standard Media Index. Base = actual media buys processed by four agency holding companies (Aegis, Havas, Interpublic, Publicis).
This is story is kind of misleading when the opposite is happening. Instead of focusing on spend which reflects a deflationary effect on average CPMs, it would be more helpful to understand overall *volume* of impressions. It would seem this information is just as easy to get.
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On the upside, I suspect there are more paid ads and fewer house and performance ads flowing through the system (and better sell-through rates). Before, only individual publishers would have known this information. Consider that exchanges provide a new level of aggregate transparency on remnant inventory.
@ Domenico. The data we published is derived from total dollar volume actually processed by the agencies. If you know an easy way to get the component data for the inventory volume associated with that, or even the CPM values -- deflationary or not -- please let us know and we will publish that too. Currently, SMI's data is the only empirical data like this we've been able to access, and anyone who finds it misleading is welcome to ignore it.
Thanks for clarifying...that's too bad that SMI can't or participating agencies don't qualify the spend data better (use of 3rd party data would be interesting, too). The problem with ignoring this is that less informed people will infer that money is coming out of display, when on a volume basis the opposite is actually happening. On the analytics/stratregy side of the biz, in the wrong hands this article could have a negative impact and certainly engenders unwarranted confusion.