• by Bill Lederer , April 22, 2014

Have you heard about the independent media trader (IMT)?  This catalyst of change is an emerging discipline focused on executing ad inventory buying and selling on behalf of marketers, agencies, and publishers, and -- at times -- on behalf of its own and/or others’ risk capital.

What is driving this new breed of special purpose media organization? The diffusion of innovation including programmatic digital media-related data and technology; the need for greater specialization and transparency; the growing power of marketers relative to agencies and ad networks; publishers’ need for trading support; the lack of sufficiently trained personnel to staff all interested market participants; and the availability of risk capital.

The IMT plays a critical role in reducing the spread between media investment dollars and audience delivery by leveraging programmatic trading the same way that electronic trading and market makers transformed financial and commodity markets over the past 20 years. IMTs execute, buy and sell orders for others with greater or lesser provision of services and may develop a variety of risk management tools including creating a market in select publisher premium ad inventory and key inventory audience segments. Thus, IMTs offer choice, specialization, independence, transparency, service, and scale.  If they offer their own technology, they may, in fact, be managed service providers of their own trading platforms.

IMTs operate in various ways. Some are non-risk-bearing execution shops, while others bear risk on behalf of their clients in the same way that traders in financial and commodity markets do, taking losses when they come up short (e.g., buying CPMs, delivering cost-per-whatever). Other IMTs may specialize in specific media channels or in specific markets such as B2B or B2C, or in customized deliverables like media barter or basket trades.

IMTs have entered the scene to address many issues that have been holding programmatic back from its true potential in advertising and trading. For example, despite a serious, strategic need for expertise in digital media buying and selling, agencies and publishers often lack sustainable trading desk specialization. Going to a typical agency or ad network, DSP, or SSP to buy/sell media is like shopping at an ordinary chain grocery store to buy fresh fruit or meat. An IMT’s services, on the other hand, are specialized in the same way that a farmers’ market or butcher focuses on select product and is expected to provide better information and service (often with better, more transparent prices). In short, IMTs are more targeted and can be more effective while delivering greater efficiency.

Transparent reporting is another major issue plaguing the programmatic media trading landscape. IMTs have greater flexibility in how they bill clients and for what. IMT invoices may include itemized details about the actions surrounding each buy, the costs of media, technology, data, labor, and other fees. Unlike so many others, IMTs should be able to offer in-market and complete reporting and auditable accountability about their trades and related outcomes.

So where does this new type of media trader fit into Luma Partners’ Lumascape? IMTs are not agency trading desks, as they may well be serving agencies as clients and may serve publishers, as well. IMTs are not ad networks, either. Nor are they DSPs or SSPs, though they may play this role directly. IMTs are a distinct player in the ad tech market. Like market makers in financial and commodity markets, IMTs have tremendous business plan flexibility, as they are able to play in any arena where digital media is traded, giving them specialized skills and abilities and specific insight into a variety of inventories, audiences, and client markets.

Marketers, agencies and publishers need to expand their media planning and buying/selling options. Consider the new, effective, efficient and easy-to-use workhorse: the independent media trader.