• by Skip Brand , April 23, 2013

Exchanges create transactional efficiency. When Jonah Goodhart and his brother funded the launch of Right Media, the first ad exchange, that was their sole intent: to create efficiency.  But exchanges quickly became second class – places to unload inventory that couldn’t be sold directly.  That wasn’t the initial plan, says Jonah, now CEO of Moat. “People believe we still need direct buying separate from exchanges because that’s the best way to buy and sell premium formats and rich media,” he says. “The concept of a premium exchange that hinges on premium inventory and premium formats and layers in efficiency of transacting -- which again is the whole concept of an exchange: efficiency -- is great. It addresses one of the top reasons exchanges are still put into a second-class category.”

With Moat focused on measurement, particularly for brand advertisers, I wondered about Jonah’s perspective on programmatic.  We’re still so focused on clicks as an industry. “Metrics that brand marketers have access to today are broken,” he agreed.  “We need new metrics. New units and premium formats like Rising Stars are also needed –along with better measurement than click-through. All of these elements come together nicely in the concept of a premium exchange.”

Of course there’s no silver bullet when it comes to changing metrics. The good news is that marketers are looking for a better way to understand success. “They inherently recognize that premium formats like the Rising Stars are better,” Jonah noted. “But historically they haven’t had great metrics or data to show that success. Whether it’s ultimately viewability, exposure time, interaction rate, or some combination of those things matters less. It matters that marketers are moving beyond the click. They’re valuing the power of better ad units and doing it in an efficient transactional system like a premium exchange.”

Over the last few years, five industry trade groups, including the IAB, have defined the Viewability metric. Other brand-friendly metrics include Exposure Time and In-View Time. Working definitions for Universal Interaction Rate and Universal Interaction Time were hashed out through an IAB working group. This focus on new metrics indicates that world of proprietary metrics is changing. “It’s less about, are people going to adopt a Moat metric and more about, are we going to be able to help marketers and publishers find the right metric,” said Jonah. Some of those have been standardized, and some are still evolving. Once upon a time, rich media players would develop a proprietary metric and sell it as a “standard,” but those days are happily ending. “Anyone should be able to measure any metric. That’s the value of having universal interest: anyone can do it. As an industry, we should be focused on finding the signals that make sense to marketers so that they see value and spend additional dollars,” he added.

“Certainly a company like Moat can enable the collection of these and other new metrics, but it’s not as if Google or Adobe couldn’t enable these metrics. In fact, Google is preparing to launch viewability measurement as early as this quarter. When huge companies like Google start rolling out products such as Active-View, their viewable impression product screen, the world actually does shift. We’re sure to see the same thing as Google and other large companies begin to adopt these bigger formats and adopt metrics to support them.”

These are important concepts for a premium marketplace. An exchange facilitates buying and selling premium ads at scale with efficiency. “Ads don’t do better because they’re on exchange. Nike doesn’t have a better way to measure because it’s on an exchange, but they certainly are more likely to buy it at scale if it’s easier to buy it at scale,” said Jonah. But if brand advertisers aren’t able to easily quantify and report on the value, they’re not likely to continue to invest.  We need to help them measure what’s meaningful to their businesses. As Jonah put it, “We’ll win if the industry as a whole moves towards better data and better metrics.”