• by Lewis Rothkopf , Op-Ed Contributor, March 3, 2011

Recently, Jason Burke wrote a piece entitled "The Limitations of Video Ad Exchanges," where he discussed the benefits and challenges inherent to buying and selling in a bidded marketplace. A knotty topic, indeed; a commenter responding to Jason's piece asked, "How is buying from video exchange... [different] than display exchange buying? Challenges in one that [don't] exist in the other?" Great questions!

1) Not all pre-roll is created equal. And much of what sometimes passes for pre-roll, isn't -- not really, anyhow. Display units can be above the fold (great) or below the fold (cheap). So can pre-roll, but it can also be user-initiated, auto-start, sound on, sound off, :15, :30, with or without companion or not even pre-roll at all. It is therefore critically important that buyers understand how the exchange merchandises the various ad executions: paying a deeply discounted price for non-premium implementations is great, but paying top dollar for a below-the-fold, sound-off auto-start unit would be most unfortunate. Understanding not only where, but how, your campaign will run, followed by post-campaign metrics that close the loop, are key to buying video at the right price.

2) There is no monkey to punch. Video advertising, almost without exception, is repurposed TV ads and interactive adaptations of TV executions. Unlike in display, there is currently no saturation of "punch the monkey"-style RON ads, and that void, along with the precise bidding that exchanges offer, creates the ideal opportunity for direct response advertisers to execute and fine-tune campaigns in a thoroughly uncluttered environment.

3) There is less video inventory than there is display. For now, at least. This means that buyers who may be accustomed to overlaying multiple targeting criteria will find that they either need to increase their bids or expand their inventory selections in order to achieve their delivery goals. Good exchanges aggregate the biggest pools of video inventory, offering strong liquidity and enabling buyers to execute across television-like reach.

4) Validate your results. As video exchanges quickly grow to fill a market need, buyers need to be sure that their bids and trades translate to meaningful, real-world results. Video ad networks often offer suites of in-depth, post-campaign analytics and research, and buyers should demand the same from their exchanges. Regardless of the media purchase channel, marketers need to tie back their campaigns to actual impact on consumer behavior.

Exchanges aren't new, but they do represent a new buying path in the video ecosystem. Beyond assuring that their chosen marketplace is clean and well-lit, buyers should be aware of the differences between display and video exchanges, letting them leverage the precision and buying power that a bidded market can offer.