Commentary

NYIAX: Quiet Revolution, Or Further Nail In The Coffin For Transparency?

I am not an expert digital advertising technologist by any stretch of the imagination, but I follow closely what happens in digital ad and marketing tech, since it’s having such a profound effect on every aspect of our business. Which is why the New York Interactive Advertising Exchange (NYIAX) interests me.

Last summer, NYIAX hit the PR circuit with its launch as a NASDAQ-supported trading platform for all forms of (digital) advertising, trading media space futures. This means that media buying is following the path of other traded commodities, from sugar to oil to wheat (and soon, probably, weed). It is open to advertisers, their agencies and publishers.

NYIAX has just closed another round of investment, which was announced in a press release on June 13: “NYIAX, the world’s first guaranteed advertising contract marketplace, today announced it has successfully closed another $5.65 million in its latest seed funding round led by WestPark Capital. This brings the company’s total funding to $16 million.

'NYIAX’s team and technology has achieved incredible traction in the advertising marketplace and is ahead of schedule on the mission to deliver Wall Street’s automated trading capabilities and financial rigor to media buying and selling,’ said Robert Ainbinder, who led WestPark Capital’s investment and is Director of NYIAX."

Again, the model is advertising space futures, and that should perhaps terrify us all. Per the NYIAX website: “With NYIAX, advertisers can enter future contracts with confidence knowing they will have the ability to re-trade purchased inventory for profit if needs change.”

That “profit” is only true, of course, if the price has gone up by the time the advertiser (or agency/consultancy holding company) might want to offload some inventory. But, as they always say with investments: Past performance is no guarantee for the future.

NYIAX’s website also states this is actually a transparent offering: “The transparent NYIAX sales process minimizes the chances of fraud due to improperly counted impressions that can be found with third-party intermediaries.”

There is certainly room for offerings that make fraudulent impressions a thing of the past. But there is a second transparency issue at stake here, which is rate card and pricing transparency.

As far as I understand it, the NYIAX exchange could conceivably allow third-party investors like large hedge funds or agency/consultancy holding companies to buy and set the price for large volumes of digital ad space available in the near future. This means the cost of advertising on space traded through NYIAX will be variable and will display similar dynamics as other commodities do. The good thing about a traded marketplace is that you can see the price change on a second-by-second basis. The bad news is that prices will never be set, and always in flux.

What do you think: Is this inevitable progress, or a further muddying of the transparency waters?

1 comment about "NYIAX: Quiet Revolution, Or Further Nail In The Coffin For Transparency?".
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  1. Michael Lynn from ECD Consulting, April 20, 2021 at 12:16 p.m.

    Couldn't agree with you more.  Transparency comprimised and opportunity for biggest players to take huge amounts of future inventory out of the market and then price at what ever level they please = extortion.  BTW...I'm not even convinced this sort of technology is of any value to agencies or advertisers other than as a means to allow big guys to corner the market(s).

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