Commentary

The Display Advertising Marketplace Is Going To Become More Like The Search Marketplace In The Next Year â€" And That’s A Good Thing

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That’s what two of the smartest guys in digital media said during this morning’s “steroid” panel. Both Varick Media Management’s Darren Herman, and Quantcast’s Adam Gerber, suggested that a rapid shift would occur in the way advertisers, agencies and publishers value display adverting, thanks to better metrics and faster exchanges, that would make it operate much more like search in the sense that real-time value would become based on real-time demand.

 

“It’s why search is a $15 billion to $20 billion business,” Gerber said, “because the advertiser knows exactly what the keywords are that they want to buy.

The medium works in real time. Everything is being decisioned in real time.

The display marketplace doesn’t operate that way. But that’s going to change in the next year.”

 

Herman agreed, and both executives said the reason why publishers are bemoaning that real-time ad networks and exchanges appear to be driving their value down, is that they still have an old-school media mentality of selling their inventory based on “scarcity,” and not the underlying value of the metrics and how valuable they are for a marketer at a given point in time.

 

It’s why, Gerber said, TV sells its inventory for the same price to a marketer selling a high-end automobile and a company selling a candy bar. But the reality is that the audiences media reach have different values for different marketers at different times.

 

“We can all buy data,” VMM’s Herman said, adding, “But what is the price and value? There is a big market gap right now about the value of that data.”

 

Herman went a step further, predicting that, “in the next 12- to 36-months, a company will pop up that is not a media delivery vehicle, but is purely just a valuation company.”

 

He did not elaborate, but he acknowledged, “I have an agenda. That’s why I like that.”

http://m.mediapost.com/authors/AdamGerber.jpgQuantcast's Gerber

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