One of the worst-kept secrets in digital advertising is that although everyone talks about exchange buying and selling, with its alphabet soup of offspring such as RTB, DSP, SSP, DMP, remnant inventory, premium reserved and Joe Zawadzki, nobody really has a clue what they are talking about. We all know it has something to do with buying and selling digital ad inventory, but we are not at all sure how it all fits together and what to do when the paper feeder jams.
Thousands of words have been expended in "thought leadership" columns, on conference panels, in company blogs and in PowerPoints to try and clarify, yet we still get that uncertain, I-can't-see-my-parents-in-the-mall gut feeling whenever the subject comes back around. Who better to set the record straight than me?
When you want to buy some ad inventory, if it's on TV, you call a guy who takes you to a $1,000 dinner, a Yankees game and a couple of Broadway shows, and your ad runs. If it's on radio, you get a recorded message that says "We are not in the office at the moment, please leave a message..." If it's print, you get invited on a spa trip or a round of golf, and they run your ad 14 times for the price of once. But digital: that's a little more complicated.
If you paid attention to Neil deGrasse Tyson, you know that beyond what is known is probably more of the same, but we can't name it other than "multi-verse." The Internet is kind of like that, an endless expanse of ad inventory that would take light years to cross (and full of Mos Eisley Cantinas). If you want "scale" (something that I think can be treated with Neosporin) you have to buy lots of Internet inventory, since most sites tend not to draw much of a crowd. This means you have to call about 400 different people who might give you a USB thumb drive or a T-shirt at best. Since they are all 22 years old, they tend to pay more attention to their SnapChats than they do to taking your order (not unlike visits to McDonald's) -- and before you know it, your client's ad is running on a porn site (or The Daily Mail, whichever is worse).
After a while the 22-year-olds got tired of people yelling at them, and in a collective huff proclaimed: "Bite me -- go do it yourself!" So everyone turned to the geekiest kid in the office (MIT undergrad, Stanford post-grad) and said "Since we have no idea what you really do here anyway, we want you to build a machine that lets us buy digital inventory without having to talk to those 22-year-old idiots anymore."
Pretty soon, word got out that when the 22-year-olds didn't handle the insertion orders, everything got better, from the ads running more or less in the right place, at more or less the right time, and that there wasn't toenail polish on the invoices any more -- so everybody told their geeky guy to build a "platform."
Meanwhile, publishers had been amassing lots of Big Data on their users by tracking their every move, adding in outside information that seemed somehow related to their own cookies (although no one was really sure just how) and labeling people who seemed to be somewhat similar in their online activities as "car buyers" or "cat lovers" or "left-handed golfers who tend to undercount their strokes but always buy at the 19th hole." Since nobody ever has more than three "cat lovers" on their sites at any given time, they decided to throw their cat lovers in with Mike's, Tim's, Joe's and Jon's, so whoever wanted to advertise to cat lovers could do it "at scale" (or steroids).
Turns out that cat-lover advertisers are perfectly happy with their TV buys, so to create some urgency, somebody who had read a lot of Michael Lewis suggested making advertisers bid against each other for the privilege of serving an online ad to cat lovers. Someone called this "unlocking the value of an impression" and was promptly assigned to clean out the office fridge.
Nobody wanted to be left out -- since much of ad tech is following the lemmings, anyway -- so everybody got a "platform," and just to further confuse things, called them something different, using vague terms like demand-side and supply-side and private, because someone in the marketing department had thought it up (or Terry said it in a speech).
The net result of all this was to drive down the prices that publishers get for their ad inventory and set up fierce, yet meaningless, debates about "premium" vs. "remnant." But if you find yourself stuck in the middle of a cocktail party conversation about ad exchanges, first try to excuse yourself and move over to the group discussing the newest farm-to-table joint in town -- OR accelerate your consumption until you are just as bombed as the others. Then you will all make perfect sense to each other.