• by Lewis Rothkopf , Op-Ed Contributor, August 4, 2010

Videocentric publishers are quickly moving toward a strategy in which multiple ad sources compete for an impression at the time of the ad call, while networks are exposing the amount they're willing to pay for an individual impression within the ad call itself. There's a temptation to call this concept RTB or Real Time Bidding, which I won't, because it's a loaded, polarizing buzzword. RTB connotes exchange, marketplace and platform, all of which are successful and proven models. They aren't, however, intrinsically linked to the concept of per-impression competition, which is all we're talking about here. (To be clear, most successful exchanges, marketplaces and platforms do employ some measure of RTB.)

Those of us who aren't moving toward this strategy should start doing so, and here's why:

Per-impression competition empowers the publisher to set a "fair value" of its inventory, and enjoy any upside created by the competitive market. Rather than setting a flat fee, in which case it may be under- or over-pricing its inventory based upon its general value, having multiple sources compete on a per-impression basis allows the publisher to benefit from the CPM premium that buyers likely place on hard-to-find users: a small DMA, a particular day part or a high-value shopping cart abandoner.

The practice benefits buyers, who are typically held to aggressive efficiency goals. They now have the ability to reach their target user at the best price, with an understanding that the "best price" is a fluid concept that changes with placement, geography and even time of day. They're protected on the upside, of course, by setting the maximum they're willing to spend on a per-impression basis.

Finally, ad servers and so-called "mediation layers" like FreeWheel, LiveRail and Adap.tv add additional value to their customers by mediating the pre-impression ad decision among the multiple demand sources. Helping publishers achieve the best eCPM lets these servers/mediators morph from cost centers to revenue generators. The VAST standard, although not a panacea, helps here too, letting sources of ad demand pass their per-impression bid without an excess of technical effort being needed.

It would be unfortunate for uncertainty and (legitimate) concern around inventory commoditization on the one hand, and ad network pricing opacity on the other, to prevent virtually all players in the video ad value chain from benefiting from the efficiencies that per-impression competition provides. To paraphrase LendingTree's excellent tagline: When ad networks compete, everyone wins.