Commentary

Exchanging The 'Ad Exchange' For Something More Avant-Garde

“I can tell you ‘exchange’ is the new ‘ad network'," a communications expert that works with several ad tech companies said to me. “Everyone I work with avoids the term.”

It’s all part of the semantics dance companies are using to stay differentiated and be oh so avant-garde. It’s no new dance, either -- during the dot-com boom, companies were e-companies or .com companies.

But are ad techers really starting to shy away from the word "exchange"? Not all of them, according to Ajitpal Pannu, chief strategy officer at Smaato, a mobile ad exchange. (And supply-side platform.)

"[W]e are perfectly fine tying ourselves closely to … the word 'exchange'," said Pannu. “If there is a desire by some in ad tech to eschew the term ‘exchange’ when referring to real-time bidding (RTB) and/or programmatic buying, they are likely doing this for the same reason so many things in ad tech have four or five names: if you can rename something you can sometimes either spark interest in it -- 'native ads' rather than 'custom ads' -- or divert perceived negative attention from it.”

He continued: “When RTB was born it naturally started out small in terms of CPMs. It was a new model and publishers tread lightly. At the same time, it behooved those in direct sales or from ad networks to label RTB as cheap and/or low quality inventory. True or not, they were doing this for job preservation reasons.”

That’s where the mockingbirds came to sing that RTB stood for “Race to the Bottom,” and that RTB is to remnant as direct is to premium.

Martin Stockfleth Larsen, chief marketing officer at Adform, a Danish-based programmatic ad platform, said he has observed some European companies shy from using the word "exchange" to define themselves.

“It’s a really interesting question,” he said. “[What Europeans SSPs] all have in common is the fact that they do everything they can in order to brand them as being a premium SSP. [Y]es, people try to stay away from the word ‘exchange’ and focus on either ‘premium exchange,’ ‘SSP’ or ‘private marketplace’ as it, per standard, provides higher yield, higher viewability, better brand protection and less fraud. Exchanges will often be associated with remnant.”

Whether or not it was their intention, GroupM stoked the "exchange is synonymous with remnant" fire when they announced plans to pull out of RTB and the open exchanges altogether by the end of 2014. That, however, was a business decision on GroupM’s part -- the unwillingness to associate with the word “exchange” just because of the word itself is a different story.

Put another way: GroupM would still have made the decision it made if “open exchanges” were called “premium marketplaces” but did the exact same thing and performed the exact same way. 

Said Pannu: “If 'exchange' is good enough for the NYSE and all the others, it's good enough for us.” Mic drop.

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