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Mike Seiman's Blog
Looking at the evolving landscape of online advertising
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On the Future of Display Advertising
As I sit at my desk, a little bored towards the end of a long Wednesday, I decided to just ramble off points about what I think will happen to DSPs and ad networks in the next 24 months in 10 points:
1 – All agencies will own a DSP, and if you are a DSP and not owned by an agency, you will wash away.
2 – DSPs will become less and less relevant, as exchanges begin to build more intuitive interfaces for themselves.
3 – CRMs will be created to manage all exchanges that will be licensed, and not take a % of media, making all agencies realize they might have made a mistake buying a DSP and not waiting.
4- Exchanges will never break out of the lower end of the ad chain, and it will still continue to be Direct Sales/Ad Network/Exchange.
5 – Agencies and advertisers will soon realize they cannot execute an effective campaign utilizing exchanges, and while it’s a nice addition to running a campaign, it can never make a campaign. Therefore, ad networks will still be the best alternative to direct media buying.
6 – Ad networks will continue to innovate, in terms of plugging into exchanges and supply side platforms, to build custom audience segments using data. This will finally be perceived as of tremendous value for agencies and direct advertisers.
7 – Supply side platforms will still exist, and become more and more like exchanges, and less and less like ad networks.
8 – Ad networks will buy more and more unique inventory by arbitraging site traffic at proper cpms, ensuring publishers they will get what they need for their inventory.
9 – Publishers will start to see the real value of ad networks as they gain higher cpms from them. They will also realize that an exchange cannot give them control over cpms, and therefore will only put bottom of the barrel inventory on them.
10 – The ad network and agency relationship will go back to the way it was before all the exchanges and DSPs, except now the ad networks will be back on the cutting edge and continue to innovate for agencies and direct advertisers.
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Mike Seiman is the CEO of global online ad network, CPX Interactive. He has twice been nominated for Entrepreneur of the Year in Metro New York. He is a dedicated philanthropist.
Comments 3 Comments
"9 – Publishers will start to see the real value of ad networks as they gain higher cpms from them. They will also realize that an exchange cannot give them control over cpms, and therefore will only put bottom of the barrel inventory on them."
So does the network provide value by smoothing out indirect revenue streams? Or is that networks expose the publisher to demand that they wouldn't see through the ad exchanges?
Greghills, re #2, sure potentially but if there are only 2-3 relevant exchanges someone will essentially create a piece of software to be bought or licensed just like search, and the idea of a huge % for managing that such as a DSP will become wasteful. As for your second comment, that would be both yes, smoothing out indirect revenue as well as increased exposure to demand.