New Rules of Revenue: Online Advertising 2010 - Conference Report

Joseph Clift

Although display advertising accounts for a relatively small proportion of online adspend at present, it is currently the subject of much debate within the industry.

This is because - unlike search advertising - display has yet to be efficiently monetised. The "rise of the machines" that has come with the development of sophisticated online ad networks has complicated matters still further.

Representatives from both the buying and selling side of the equation discussed all of these issues at New Rules of Revenue, an AOP event held in London in February 2010.

Takeaway points from the event

  • Ad networks and exchanges have a significant role to play in the future.
  • The automation process is still being refined, improving price efficiency for the future.
  • Agencies have leapt on the bandwagon by developing networks of their own; this development may or may not benefit publishers.
  • Gathering user data via cookies held within display ads is a source of conflict between the buy-side and the sell-side, as well as causing concern among policymakers and the general public.

Trends in display advertising: RTB and agency-owned networks

The way in which display ads are bought and sold has undergone a radical overhaul in the last decade. This evolution provided the theme for the day's first presentation, from Matt O'Neill of Admonsters Europe. 
 
Rise of the machines

The traditional way of selling media - a buyer calling up a publisher with a demographically-attractive readership, agreeing a price for placing an ad, and completing the transaction - has been largely replaced by automated networks and exchanges for online display ads, O'Neill argued. However, the market is still in flux as these processes are optimised, with buyers and sellers "in the process of making the rules," he added. 
 
Generally, online publishers' supply of adspace greatly outstrips demand. Ad networks, some of which have been around since the beginning of the 2000s, help to soak up some of the inventory that is not sold via direct sales teams. 
  
This has led to a two-tier system of high-value ad sales sold through humans and the low-value "remnant" being sold through machines.