What AdTech Can Learn From Bitcoin

Advertising is undergoing a fundamental rethinking. Over the last decade, a set of radical technologies have ushered in massive waves of transformation in the publishing and advertising businesses. New revenue sources for content creation and opportunities to reach audiences in completely new ways have brought fourth many new technologies. That is where most of the focus has been. Given the technology the media industry has in place today, what would we come up with if we started from a clean slate? We are living through that moment in our industry. We are having a “Facebook” innovation moment because of a “Bitcoin” disruption.

The evolution of technology in advertising is shifting because of a focus on new areas of innovation. The last wave of advertising innovation focused on bringing advertising from the old manual-space into a machine-automated environment. But, the processes that we automated were originally designed to be done by people. Now that a majority of processes originally designed for manual human-driven tasks have been automated, the focus of innovation is about optimizing the system in its current state. It’s like the leap from email to social media. Email is just an electronic letter while social media is a communication innovation that could only exist because we have the internet. The “Facebook” innovation.

The technology space in which advertising operates today is very different than a decade ago. But like advertising, the financial ecosystem has also changed so much in the last decade. Innovation now focuses on things that you simply couldn’t do without computers, as opposed to computers being automaters of human tasks. The new space of innovation is focused on a better understanding of a network of advertising transactions. Now that innovators can examine the network, they are rethinking its fundamental parts. In finance, technologists rethought the entire idea of money. Rethinking fundamental parts of the system is where real innovation is happening today. The “Bitcoin” disruption.

We can draw a parallel to money. Money was originally made of a precious metal, to carry its own value. Then paper money was invented, physical value was uncoupled from the currency. Then checks, physical representations of money. Then credit cards, which are debts that represent future checks. Today, bitcoin. Bitcoin is a purely mathematical representation of money, it uncouples money from the government or country whose currency it represents. There is no such thing as a physical bitcoin, it is not issued by any government or body, and it’s just data. To put that in perspective, Satoshi Nakamoto invented a way to move and store value, Bitcoin, that innovated on the invention of fiat currency in China over a thousand years ago. All that happened because of the technology network underpinning finance.

So what does that mean for advertising technology? It means that we need to start being mindful of rethinking the most fundamental ways in which the business works. Should we be buying impressions? Should we be buying GRP? or should we be buying something else? Now that the industry has so much technology built-in, what can we do now that we simply couldn’t do a decade ago? The answer is the way supply and demand get defined, measured, and are made to meet.

Be Prepared for the Great Advertising Technology Tsunami

What is the next big thing out there that is really going to change the media game? I’m talking about tectonic changes. The way the introduction of display advertising really changed the game or what we are witnessing today with mobile. Where is the next big wave of disruption? It is going to be the expansion of markets and trading technologies. That might seem a bit obvious, but I think what is driving the change is very different than what drove it in the past. It is this reason that will make the next wave of media trading so disruptive. The most recent disruption in this space was the ability to buy impressions in real time. The difference is that real time was a bolt on to the existing system. Real time bidding made something possible that didn’t exist in the past, the allocation of an impression based on real time market dynamics. The next expansion will be different. The next expansion of advertising and media technology will not be a bolt-on, it will drive changes at the heart of media buying and selling.

So, how can disruption be measured in our business? For media, disruption is measured in the ability to shift spending on a media plan. Better ways to achieve campaign or media buying goals is the measure by which media products are judged and priced.  The better the product, the more demand it will capture. Looking back, it is clear that the advent of display media really moved a significant amount of budget around in media plans and that mobile is doing the same today.

We saw the first move in the expansion of trading technologies when programmatic direct became possible in display. That small foothold has been expanding into things like print and outdoor media. The new changes are starting to build. The new systems are not the media planning platforms of old. Those were just messaging and ticketing systems that automated the paper process. These new changes bring new processes. Much more efficient processes.

There are literally billions of dollars of opportunity to create value by eliminating fraud and unviewed impressions. To do that, processes have to be better. We all know that the old way of media buying is just not measurable enough anymore. Measuring better means more efficient capital allocation and better outcomes. It means that sellers need to be able to slice, dice, and price their available inventory much better, and buyers need to be able to find it and bid.

This is the next disruption in media. Media transactions will be smaller and more frequent. Buyers will be buying shorter flights and more targeted audience segments. This means buyers and sellers need the tools to help them do what they already do, but at scale. Give people more time to make more decisions by speeding up or automating more of the basic administrative stuff. It’s like the difference between a hacksaw and a Sawzall. They do the same thing, except the Sawzall allows the carpenter to focus on cutting without worrying about powering the saw. The next disruption in media is power tools for buyers and sellers that meaningfully impact how budgets are allocated across and within media plans.

How Should We Measure Media Value?

Originally published on AdExchanger

Measuring the comparative value of media inventory has been a longstanding challenge. For both sides, the relative value of media inventory is the most important measure to determine price.

At the heart of the problem is the fact that each buyer measures value differently. While that is true, the questions each buyer asks to find value are the same. Being able to answer these questions about available media inventory means that the optimal mix of targeted inventory, given current market conditions, can always be found.

If a media-buying team can answer all of these questions about all if its inventory sources, it can confidently say that it is always buying the best-performing inventory at the lowest price, given the condition of the market.

Since guaranteed deals set the price before the deal is done, the exact value of each possible deal can be compared to determine which will provide the greatest amount of value in budget.

How did the media I bought from this source perform on each metric?

In media, value is measured by the amount of performance achieved. Since performance happens along multiple measures, viewability, click-through rate and conversions, we can think of each of these as a measure in the value space.

Simply put, the best answer that a targeted inventory source can provide is that every impression is viewable, every impression results in a click and every impression converts.

The worst answer is when viewability, clicks and conversions all total zero. When everything converts, every last bit of value was captured. When nothing converts, no value was created.

How efficiently was this source’s inventory moving prospects through the funnel?

The next challenge in measuring value has to do with how steep the sides of the funnel are. In other words, how efficiently does the audience of this inventory source move from the top of the funnel to the bottom? Low viewability and a high conversion rate are just as inefficient as a high viewability and a low conversion rate. The efficiency of the funnel measures both. The wider the funnel is at the bottom, the better.

How much performance and efficiency am I getting from this inventory source at this price?

In the end, it is about effectiveness. Inventory that delivers high value may be important, but if the price is too high, it might actually be less effective than something cheaper. So when comparing different media inventory, it is the combination of value and price that drive the decision.

How much audience scale does this inventory source have?

Having fairly priced and efficient inventory is great, but there is still another piece missing: the amount that is available for sale. Being able to achieve campaign goals with the least number of sellers is important in keeping down the cost of the media buy and ensuing administrative costs.

If the media-buying team can answer all of these questions about all of its inventory sources, it can confidently say that it is always buying the best-performing inventory at the cheapest price, given the condition of the market.

Without viewability price does not measure value

While much discussion of viewability has taken place, there is still room to discuss viewability in the context of media markets. The true price at which something will sell in the market contains a very important bit of information. Pricing and market data within media are like the DNA building blocks for our understanding of the market. You need to have all the pieces to understand what is going on. True price is the most important piece of information. For buyers, not having the ability to understand the unit price of inventory, which will be viewed by real audience members matching their targeting, means there is a missing piece in the DNA that makes up that buyers’ understanding of the market. Without the knowledge of price, a significant amount of decisions cannot be made with certainty. An impression that is not known to be viewed has a price that has little information buyers and sellers can glean from. Viewability measurement is so important because without it, price cannot be used to compare the value of different media inventory. In turn, that means that a real negotiation is more difficult.

Buyers and sellers want to know that they are doing business ‘on the level’. Viewability is not about higher or lower prices, viewability is about finding the right price. For those hiding in the shadows, lack of viewability hides true quality, artificially raising effective price, and can be used as a negotiation bludgeon to artificially lower price. In the end though, all the good folk of the media market just want fairness.

In media markets, buyers know ‘a price’, the problem is that the price they know is not exactly for what they are buying. Some media buyers will read the previous statement and disagree. I argue that the only price the buyer cares about is the CPM of all the real impressions. If a buyer knows how many impressions were shown to their specified audience of real people, in a viewable manner, and the real unit price of what they’re buying, before the purchase, they can proactively select the inventory that will perform best.

Media is not a commodity, the viewability of each publisher is unique and the mix of real and bot impressions is unique. Moreover, two buyers who buy the same inventory at the same price will not achieve the same ROI. So, every publisher is different and so is every buyer.

Let’s work through an analogy. Imagine you’re a contractor building houses. You have an opportunity to build houses that you know will sell for $1000 per square foot. What should you build to maximize your profit? Well, if you consider all the materials and labor, you can mathematically figure out the most profitable size house to build. But what if you had no idea what the price of the real materials would be when you need to build the house? What if the amount of defective materials varied by store and manufacturer and you had no way to measure it? Viewability is exactly like that. Without viewability you don’t know the actual price of the product that you need to buy.

Today, the data landscape is rich with solutions that help separate the wheat from the chaff when it comes to impressions. This data powers buyers’ ability to look past the amount they paid and into the price of target audience and media.

Using that data to power media buying decisions, the ability to measure substitutability begins to emerge. Figuring out “what to buy instead” is a very important function of the buy side. Houses are not commodities, but we all know that when you have to choose a place to live you figure out how to balance the good, bad, and price. The second choice at a lower price can quickly become your first choice. Without viewability, you cannot accurately measure price, and without price you can’t make good decisions to balance the good, bad, and price.

The Programmatic Catalog

As the process of media transacting becomes increasingly streamlined, the number of buyers a publisher interacts with continues to increase. While many are hidden behind the real-time technology stack, publishers have many more counterparties buying their inventory than ever before. The increasing presence of technology and complexity of the media transaction process  has created a new need – product information management. The recent acquisition of Yieldex by AppNexus for its forecasting capabilities and programmatic direct platform is a clear indicator that the big players are beginning to recognize this need. Ad Ops and Sales teams need an electronic map of the inventory landscape. What is on the map? How much of that inventory do they have? At what price should it be sold? In which channel? Publishers need an “app” that can do all of that by automatically collecting and analyzing data. Remember Programmatic Inventory Has A 'Yellow Pages Problem'? Folks have been talking about this since 2012

With that in mind here is a simple question: do publishers manually update their audience data? Are there analysts that update cookie profiles? We all know that the answer to that is no. So why should publishers have to manually create all their placements, ad units, products, and guaranteed targeting in the ad server. Publishers should have tools to scale up that process using technology.

Today, solutions construct a single view of the future. In reality, there is not one future, there are a bunch of possible futures each of which has a different probability of becoming reality. The future is uncertain but understanding the landscape of things that will very likely happen, will probably happen, and might happen can be clearly defined.

Obviously there are too many ways to sell and too many prices for today’s manual processes to address. The problem is that you can’t just update the current process. Almost all of a publisher’s new buyers have a very specific set of buying criteria for media. None of these criteria exist on the rate card and none of them has a price someone can just look up. It’s just too complex to sell that way. In the real time environment, data companies have filled the need for near instant classification of impressions for sale and pricing is solved for via auction. What has not changed is how publishers classify forward inventory.

Fortunately, these problems have been faced by other industries and has been solved for them by some of the best technology companies in the world, Oracle and IBM to name a few. It’s called a Product Information Management System (PIMS):

Centrally managing information about products, with a focus on the data required to market and sell the products through one or more distribution channels. A central set of product data can be used to feed consistent, accurate and up-to-date information to multiple channels such as sales teams, marketplaces, and direct deals. - Modified, from Wikipedia

Some will contend that they have such a system. While that may seem true, almost all the information in their system is created, maintained, and updated manually. Again, do publishers manually update their audience data?

A product information management system for publishers should be designed to be integrated with all sales channels, provide an accurate and constantly updated catalog of all the things that you can sell, how much inventory is available for each, and its price. Synchronized systems allow publishers to increase prices as inventory is selling out or decrease it if it is going unsold. It keeps sales teams, marketplace offers, technology partners, and ad ops teams all on the same page. Publishers can present any package they could possibly sell, with an appropriate price, to any sales channel, at any time through a single synchronized platform.

We Need To Rethink Marketplace Fees If We Want Better Liquidity

Originally posted in AdExchanger We can thank the long struggle between advertisers and agencies for the fee structure used throughout today’s online advertising industry. Agencies have always wanted to pass marketplace fees on to advertisers, but advertisers only want to pay media costs.

As a result, a significant portion of the industry hides transaction costs in the media price. Transacting environments nearly always charge the publisher by deducting a fee from the buyers bid. It is unclear if any transaction business in the industry has been able to layer its fee on top of the bid.

This struggle between agencies and advertisers has hamstrung the whole industry by forcing the use of a fee structure that fails to yield the best result for anyone. I believe that moving to a make-or-take model can fix this and improve market liquidity for everyone.

In the end, everyone seeks to get the most value out of any transaction, even when that transaction is buying services from a marketplace. The most obvious strategy is to maximize our own outcomes. Given that we know we will all act this way, does every fee structure for the services of a marketplace have the same result? No. The best model is one in which everyone’s interest are aligned, including buyers, sellers and the marketplace itself.

‘Going First’

There are two types of participants in a market, and I’m not talking about buyers and sellers. We need to look at the participants of a transaction in a different way.

In every transaction, there is someone who “goes first.” More specifically, they are the first party – it could be either the buyer or seller – to state the price at which they are willing to do the deal. That information creates liquidity. The marketplaces in which lots of buyers and sellers are willing to broadcast their price need far fewer transactions to be liquid. In contrast, the markets where the price at which buyers and sellers are willing to make a deal are secret need many more buyers, sellers and transactions to be liquid.

That being the case, it doesn’t matter if you are a buyer or a seller, “going first” is clearly a benefit to everyone in the market. So, the side creating the benefit should be rewarded and the side consuming that benefit should pay. In a marketplace, a fee structure that accomplishes that objective is called a make-or-take fee structure. In other words, if a buyer puts in a buy order before there exists a sell order to match with it, the buyer gets the reward. It is also true the other way: If the seller puts in a sell order that must wait for a buy order to match, the seller gets the reward.

This way you can always choose to go second and keep your desired price secret until you see someone on the other side that wants to make a deal at your price.

Make-Or-Take

This strategy makes for a business model where buyers and sellers are rewarded for participating in the creation of a crowdsourced “book” of supply and demand that all participants have access to. In stock markets, the side that is “going first” is referred to as making liquidity, while the side that is “going second” is said to be taking liquidity. Hence the name: make-or-take model.

In real terms, this means the current financial exchanges, such as the New York Stock Exchange or NASDAQ, charge market participants who “go second” about $0.30 for every 100 units, of which they pay the participant who chose to “go first” about $0.27. The difference, $0.03, is the exchange’s revenue. The implication of this model is that those who choose to “go first” in the market actually get paid to trade.

For a long time, folks in the industry have dreamed about a central repository that enables buyers and sellers to understand at what price inventory will clear and how much is available. But if buyers and sellers receive no benefit from listing their intentions in this repository – meaning there is no payment for “going first” – no one will do it.

That is why the dream of a giant catalog of available inventory has not materialized. There is no mechanism in the market to create that incentive.

For Guaranteed, 2-Sided is better than 2nd Price

Hal Varian, Chief Economist at Google once said “All of the major search engines use auctions to price ads. The reason is simple: there are millions of keywords that need to be priced and it would be impossible to set all those prices by hand.” Hal’s thesis was the underlying rationale for using the same auction model for search and display advertising. That is why today’s exchange technologies all operate using a second price auction. The problem is that you can’t use second price auctions for guaranteed. Which is why no one is doing it. There is a better way to trade guaranteed media. We can’t leave the best guaranteed inventory to sell through technologies which ecommerce figured out 20 years ago.  We need a market driven, technology powered, negotiated marketplace to buy and sell guaranteed media.

At first, it is easy to think that the focus of Hal’s statement is about labor. But if you look more deeply, you find that the key action in Hal’s quote was ‘set all those prices.’ If you can’t calculate and set prices as a seller you need the buyers to set them for you. Or in Google’s case, if ‘can’t’ is because it is too complex or expensive, you let the auction do the heavy lifting for free.

What if the problem of ‘set too many prices’ is already solved? What if there was already a way to automate it too? If that were true, the seller would want to have control over setting the ask price of their sell orders. The nature of guaranteed is that we have much more time to buy and sell it. If the seller has no bids, they can wait. If a buyer sees no inventory they can leave a bid. This type of trading works much better in two-sided auctions.

The fundamental difference is that two-sided auction transaction prices are set by both sides. Neither side has to do the deal right now. Guaranteed media is a negotiated media transaction, there is no negotiation in second price auctions. The auction decides. In a negotiated environment, each side has the power to change the price at which they are willing to do the deal. Negotiation is all about change.

Two-sided is different:

-Auctions match bids and asks, they don’t determine clearing price. -Resting orders. Buy and sell orders stay open. -A continuous auction where a buyer describes demand so it can be understood by any seller, to identify if they have matching inventory they may want to offer in reply, and vice versa. - Depth of forward supply and demand liquidity can be measured. - Supply competes for demand and demand competes for supply in the same auction. - Buyers can search for supply and Sellers can search for demand. Buyers can query sell orders and sellers can query buy orders; each can query the price and amount required to fulfill their order. - Market data is deterministic.

For this, orders have to be kept in a ‘book’ and every market participant needs to be able to see this book. If you know what the supply and demand in the market is, you don’t need to guess what it will be. Negotiation of all those prices is possible because the problem of ‘set too many prices’ is already solved.

As an industry we need to have a new conversation about technology for guaranteed. Current guaranteed models that use the ad server as if it was designed to be the back-end for an ecommerce platform for guaranteed media buying don’t meet the needs of buyers or sellers. There is a much better way than ‘add to cart’ and ‘proceed to checkout.’

We can’t rely on auction models designed for substitutable real-time keyword searches to trade inventory that is not substitutable. We need innovation.

Illiquid Media Markets Leave Industry Flying Blind

First publisher on AdExchanger January 26th, 2015 Markets and exchanges are now an everyday part of life in the media industry. Like all businesses, they seek to maximize value for customers and create the best possible incentive for buyers and sellers to participate. Since exchanges and markets are two-sided business models that bring buyers and sellers together in transactions, they must incentivize both sides to come to the table to the greatest degree.

In other words, markets and exchanges succeed when the opportunity to transact is maximized for both sides. This happens when markets are as liquid as possible. Unfortunately, today’s media markets and exchanges are just the opposite, which leaves buyers and sellers playing a guessing game.

The most visible symptoms in this illiquid market are massive volatility in several areas, including the second price, across all platforms, in open and private exchanges and the supply in open-market inventory. In financial markets, a 5% or greater spread between bids and what is asked is a sign of illiquidity. In media exchanges, the bid/paid spread averages 50%.

For sellers, this means that price floors are not effective in creating bid tension, which hurts aggregate revenue and has driven the recent shift to private markets. For buyers, supply is sporadic and unreliable as higher priority environments, such as guaranteed and private markets, intermittently siphon off supply, which increases price volatility even more.

The price volatility and lack of reliable supply make it nearly impossible to understand what the market thinks any impression is worth. We’re all flying blind. While there are market models that solve for these problems, none of the major players use them.

One Market, One Buyer

Currently, each bidder in an impression auction is likely bidding on a different set of attributes with a different ROI forecast. There are negative economic side effects when impressions are put into auctions designed for perfectly substitutable  goods. In reality, each bidder is in their own micro-market with the publisher. A market with one buyer is not liquid, even if combined with many other buyers in a single auction.

When Google introduced a one-sided auction for search, it was, and still is, the right auction structure for that type of media. If all you know about an impression is the search string, such as “Hawaii flights,” all searches are equal. But when that market model was introduced to display media and used beyond bottom-of-the-barrel inventory, funky stuff started happening.

In the current auction models, buyers have no idea at what price sellers would be willing to sell. Sellers have no idea what an impression is worth. The auction model is designed to figure that out. But does the market model make sense if buyers and sellers already knew what an impression is worth before sale? Not always.

Illiquidity

While many refer to the opportunity to transact or the availability of impressions in a market as liquidity, like all things related to media trading, there is a subtlety when talking about the opportunity to buy actual impressions. The classic definition of liquidity is something that can be sold rapidly, with minimal loss of value and a continuous supply of willing buyers and sellers.

In a real-time delivery market, such as classic RTB and private markets, there is clearly a lot of speed, but what about the loss of value part? Selling an impression for some amount of money is better than nothing, but if the sale drives down the price of future transactions, value has been lost even if the sale generated revenue.

For example, airline seats, like impressions, yield nothing if left empty. But if a plane is half full, you couldn’t buy that seat for $10 at the airport counter and there would be no second- or first-price auction to determine the price of that seat. That would teach airline customers that seats could be bought very cheaply, at the last minute, which would drive incremental revenue and sell seats quickly but at a loss in the value of future sales. Eventually, customers would expect to pay less and would wait until the last minute to buy cheap seats.

A market is liquid if assets can be rapidly sold with little impact on value. The precipitous decline of media prices since the introduction of RTB and private markets, regardless of the number of bids, indicates the market has little liquidity.

A Willing Seller?

A 2013 study by Yuan, Wang and Zhao contains a visualization of auction liquidity by mapping bid price and price paid from 12,965,119 auctions, 50 placements and 16 websites of different categories.

In each auction the spread between the bid and price paid is the same as the gap between the first and second price. The spread is used to measure liquidity. This data indicates that the impression auction bid/paid spread average about 50%. In most financial markets, the bid/ask spread is less than 1%, while anything greater than 5% is considered illiquid.

That may sound like heresy to many media professionals familiar with ad tech. In reality, the essential characteristic of a liquid market is that there are always ready and willing buyers and sellers.

In real-time markets, sellers do not know if there are willing buyers until they offer the impression for sale. Sellers can guess what buyers may be willing to pay based on historical data, but there are no buy orders in the market for them to act against. For buyers, the lack of a “buy it now” price, with only price floors, means they don’t actually know if there is a willing seller.

All of this carries big economic implications, including the fragmentation of display media into billions of individual and illiquid micro-markets. The historic decline in publishers’ pricing power since the introduction of real-time markets has been driven by the creation of illiquid markets that have the illusion of liquidity, not the oft-repeated industry myth of infinite inventory.

Programmatic Direct Is Automatic Not Programmatic

It's time to clear up some of the marketing doublespeak that has surrounded the growth of programmatic direct. There is a distinct group of folks who are working hard to muddle what programmatic direct does and apply what people have learned from real-time-delivery markets, by over emphasizing the intelligence of the automation.  The strategy to do this is based on leveraging all the hard work  real-time and private market technologist have done to develop fast and smart technology. Marketers of programmatic direct are equating the cruise control feature of your car to Google's self-driving cars. One is automated and one is programmatic. One just does while the other is 'thinking.' That's a big difference.

In short, real-time and private market technologies work really hard to allocate each impression so that it will yield the highest revenue to the publisher and to sift through billions of impressions daily to find the right audience for advertisers. These systems do a lot of 'thinking.' They work to understand what is actually happening in the real world and automate choosing the best decision to make. In short, exchanges, markets, SSPs, and DSPs, leverage lots of data and technology to make lots of decisions really fast. That is the promise of programmatic.

To draw comparisons to other technologies, programmatic direct is the grubhub of ad tech. Customers can see your menu and put in orders that are trafficked right to the kitchen. The difference is that real time technologies help to optimize transactions for buyers and sellers in terms of both pricing, performance, and the application of audience data. None of this happens in programmatic direct. The real-time stack is like a technology that helps a restaurant figure out if they should use the ingredients in their fridge to make Vegetable Chow Fun, Pasta Primavera,  or Bún Chay to get the highest revenue from the ingredients in stock. For buyers the real-time stack helps them to figure out what is the best veggy noodle dish to buy in the market at the moment.

So, yes the programmatic in programmatic direct means automation, but it is not the same programmatic that is in real-time markets. It is not as good and it is not as smart. The trick was to co-opt the meaning of the word to make things seem better than they actually are. There is a reason why  we have two separate words for programmatic and automatic. If it is the same, why didn't the ad tech marketers choose to call the technology automatic guarenteed? The reason is that programmatic has a 'sexy' that automatic does not have.

Our friends over at AdSlot seem to agree. They built this nifty graphical illustration titled Automatic Guaranteed.  Nice to know that we agree.

In that context, let's clarify how MASS Exchange is unique:

  • A unified view of price and depth of supply and demand for future impression inventory.
  • A programmatic system that drives transactions by 'thinking' through market conditions, not an ecommerce platform for media.
  • An environment where bids to buy and offers to sell are matched by a rules-based matching engine in real-time, but impressions are delivered at some time in the future.
  • Analytics that provides sellers a better understanding of their inventory in the context of market demand.
  • Siloed markets seamlessly connected via a unified market interfacing technology.

The Mystery of the Impression Auctions

There is more than one way to auction impressions. Understanding that difference is something that can best be explained with a simple story. Let's imagine for a moment. You are walking down the street and someone hands you a box. It is heavy, so you hold it with two hands. Surprised that some random person handed you a box in the middle of the street, you stand there for a moment, confused.  You think to yourself "what the..."  and start to play-back in your mind the hand-off that just occurred.

As you focus your thoughts on what just happened, you hear a voice calling out. You can't quite make out what it is saying. You shift your focus to find that voice is actually yelling at you, yelling $51.07. "Wait, what $51.07?" you think to yourself.  And then it dawns on you, that the person right in front of you on the street just offered you $51.07 for the box. So you look down. "What's in this box?" As you look down, you notice that the flaps of the box are closed using one of those self-folding interlocking methods. Still. there is a gap. One big enough for light to shine through so you can see inside.

Inside the box, you see a bunch of stuff. Some things look cheaper and some more expensive. You think to yourself, "Huh, sure, I'll sell this." At this point you are sure that this box was destined for the trash, but you could sell it.  So, you take the $51.07. Before you have a chance to put your money in your pocket it happens again, another box, this time at $95.06.

You're happy, you just got a bunch of cash for something that was about to get tossed out. You turn to make your way back and you realize that right behind you stood an antique store. One that is closing up shop and moving. In fact, today. The movers are bringing boxes out of the store. Suddenly, one of the moving guys hands you another box. And just then, you realize that those boxes were not about to get tossed out.

That is the story of information asymmetry and that is what is happening in many auctions today. What just happened to you on the street was a perfect example that there is a key piece of information missing from the sellers decision, that the buyer has. The people on the street offering money could see where the boxes were coming from. In fact, they also had their own information about what was inside the box. Now, let's compare that to how that closing-down antique store use to sell and auction its wares. Before shutting down, the antique store would post their prices on the merchandise and allow potential customers to come in an inspect it. When they needed to move some inventory, they would hold auctions. The key similarity between both is that the antique store would tell you exactly what you were about to buy and let you inspect it.

In this situation, the antique store is making a transaction based on a good price. The decision here is simpler, it is just "what is this worth?" In the boxes situation, the decision is much more complicated "what is this thing and what is it worth?" If the definitions and sources of that kind of information lack a common and agreed to standard, buying and selling can only be like the boxes situation and never like the the antique store situation. Value and price are very important decisions that need to be made by both buyers and sellers. If those two elements are determined separately, than both sides have a better understanding of transactions and potential transactions.

In  the broader worlds, there are many ways to buy and sell, and many ways to manage risk. The greatest value is created for buyers and sellers when they can choose the  best way for themselves to buy or sell. In some situations one way is superior, in others, another way is . The diversity of methods is a critical part of a healthy and vibrant market.

The Frontier Of Innovation In Advertising

The evolution of advertising technology innovation is shifting. It used to be pipes. Now it is something else.  In the last few years, technologists have been hard at work building an interconnected network for delivery and bidding across the media industry. Now, the network has reached critical scale. This is when things change. There are many day-to-day technologies that we take for granted because the networks they built have already reached scale - credit cards, telecommunications, and social media to name a few.What good is a phone if there is no one to call? Why would you use a social network if nobody that you knew was on it? What use is a credit card if you can't find somewhere to buy stuff with it? Networks are awesome! Networks create a whole new set of value propositions to their users. The value of the network isn't just that it provides a simple way for members of that network to communicate. Does a traditional phone call between two people have the same value proposition as a conference call, just smaller? No. One conversation among many people is not the same as many conversations between two people. That math has no power here.

The evolution of advertising technology is shifting to the "conference call." The reason that you have seen fundamental innovation in our industry stall is that the basic rules of the media plumbing are set. Innovation among  the major players now focuses on scale, speed, and cost of operation. That's cool, but those are not fundamental problems facing the advertising and publishing industries. Media buyers and sellers just don't have enough communication in the market about what is going on. Communication in the market can bring about amazing outcomes.

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In an AdExchanger article, members of the Facebook technology team discussed 'the"people-based" marketing opportunity.' The idea being that Facebook is scaling targeting resolution across the entire internet. In an environment with this level of complexity, everybody needs to be talking to everyone else so that there are enough 'conversations' being had. A single 'conversation' only tells you price. A conference call tells you value. Would you rather be a buyer and know the price of something or what it was worth?

What if publisher Somethingsnappy.com decides that they want more money. The Somethingsnappy.com management team undertakes to monetizing their platform by buying bot traffic and other such shenanigans. Over time, as the buyers of Somethingsnappy.com media realize that there are problems, they start to pull media buys and reduce the demand in the market. In a "conference call" market the change in demand is seen as fewer buy orders and lower bid prices on the order book. This process sends a very important signal to Somethingsnappy.com buyers who are still in the market, something may be wrong with Somethingsnappy.com inventory; the price is dropping. This kind of value can only come from  "conference call" market innovations. The "conference call" identifies poor value faster. But, this is a fair market, so the pendulum swings both ways.  If Somethingsnappy.com's media performs really well, outstanding in fact, then more bids and or higher bids will creep into the market. The "conference" call identifies better value faster too.

In a second price auction, only the winner knows when demand is dropping, and they only know it if it happens at the second price. That is a pretty blunt instrument for measuring broad demand.

If powered to do so, a network can be its own built-in policing mechanism. The price of an item in the market is a reflection of demand. In a "conference call" market you know something is good because it sells for a premium. The price is the voice of the market and the collective expression of the members of the network. Quality in the market is much easier to identify. Intrinsic policing is just one of the many benefits of the "conference call" market.

While that is all true, there is one caveat. Price, or any other signal from the market is the result of data, lots of data. This is where the network actually is. It is not the pipes, because the members of the market act through the pipe, the activity of buyers and sellers is what  flows through those pipes. It is the information communicated across the network, not the network itself. The market is our understanding of historical price information and the representations of future supply and demand. Together this data forms our view of the market. This is where the next wave of ad tech innovation will take place. There are a few companies in this space, but I'm not sure that even they know that they are in this space...

Creating New Media Markets

What is at the edge of a market

If something has never been traded before, how do you start trading it? How do people go from not selling something to becoming buyers and a sellers. That is where the edge of the market is. The place where each side has something they are willing to exchange. When people decide they would rather own a product than own a $20 bill, buyers are created. When people decide they would rather have someone else's $20 than the product they own, sellers are created.

That means the buyer gave $20 and got at least that much value and that the seller believes this is probably the most they can get for this product. How do you encourage people to understand that there is value in the market that is up for grabs?

Show it to them. Teach them how to grab it.

Let's try a real world example. Meet Alice, Alice loves to bake. She makes lots of cakes and all her friends love them. In fact, like any good friend who recognizes a good thing, Alice is told by her friends "you could totally sell these, they're awesome." So, Alice starts trying to sell her cakes. Did you see what just happened there? Alice's friend showed her that there is demand for the product she is making  - "you could totally sell these." Alice's friend showed it to her and taught her to grab it. If Alice would rather have more money than the cost of the brownie she just baked, we have a market.

The Implications for media

Now that we have that behind us, let's talk shop. What does that mean in terms of trading advertising? Well, every buyer in the attention markets industry would love to buy audiences at scale from publishing partners. They do, through private markets, but at what scale? Are private market deals searchable across the market? No. Is there pricing and market data? No. So basically, real-time markets don't consider the future in how they price. Supply and demand only exist in the present. A bid you see in one auction has no influence on a bid in a different impression's auction, now or in the future. Did you see what just happened there? I showed that there is demand for a product, future impressions, that does not have a reservoir of buy and sell orders.

Buyers would much rather have a market where they can freely and continuously manage their flow of capital. Sellers would love to allocate guarantees quickly and dynamically. Private marketplace deals take some time to put together, they require a commitment from both sides, are a small universe onto themselves, and provide no way to understand pricing throughout the market. If I don't like how my money or assets are put to work, how long does it take to fix that? how much work does it take? Electronic markets are designed so that it takes minutes or seconds to manage transactions.

If you can find value, a market participant has media that they are willing to sell at some price and a media buyer willing to buy at that price, you have crossed the edge and entered the market. In media, there are a lot of buyers and sellers on the edge making deals and trading media. What does not exist for reserved and guaranteed media is an exchange, a reservoir of buy and sell orders.

What is past the edge of the market

Sure, there is programmatic direct, but that is like needing to have a separate phone line for every person you call. Programmatic direct systems can only support two-way conversations. Transactions do not represent the outcome of many overlapping supply and demand interactions. Programmatic direct provides a platform for a specific form of communication: "Hey, I want to buy/sell your stuff?" What buyers and sellers really need is a much more complex web that stretches across the edges of the market. It is not about the buyer telling the seller or vice versa, that is a two-way conversation. It is about the buyer or seller telling the market that they have supply or demand and letting the market find the other side for them: "Hey, does someone want to buy/sell this stuff?"

They way a market is designed makes all the difference when it comes to finding buyers for sellers and sellers for buyers. In illiquid markets, buyers and sellers find each other one by one. In liquid markets, supply is matched to demand by the market itself, the exchange.

Where Is The Sabre Systems For Media

If you have been around the media and advertising industry for more than a few months, you have probably heard people throw around the name Sabre Systems.  Why do so many people in the industry throw this name around? What does it actually mean?

Like most non-media terms bantered around our industry, most people who refer to Sabre Systems, really have little understanding of what Sabre actually is or does. Understanding the value of such a system in media is really important to a full understanding of the challenges facing media buyers and sellers. So, lets start with the problem Sabre was designed to solve. As Wikipedia defined it "In the 1950s, American Airlines was facing a serious challenge in its ability to quickly handle airline reservations in an era that witnessed high growth in passenger volumes in the airline industry. Before the introduction of SABRE, the airline's system for booking flights was entirely manual."  Sounds awfully familiar. Sounds like the reason every programmatic direct technology has for their existance.

For a quick review of the players, we have Twixt (Appnexus), 49BC (Rubicon), Yieldex Direct, Adslot, iSocket (acquired by Rubicon), and Shiney Ads (also acquired by Rubicon), PubDirect (PubMatic), and Mediaocean's Prisma.

In reality, the value of the automation Sabre provided was to overcome the issues of scaling the airlines booking workforce. There were simply too many flights, too many seats, and too many queries to manage with a people-based system. Now let's think about that in the context of direct media sales. How many media companies have you heard complain about lost revenue opportunities associated with the inability to handle the number of direct deals? Is direct sales experiencing 'high growth' like the airlines of the 1950s? The answers to those two questions are: exactly zero and no, in that order. While the efficiency of having less paperwork, emails, and calls to deal with in booking media is important, it adds very little value. Sabre was created because automating the ticket buying process for airlines in the 1950s was critical to enabling them to drive significant growth.

So how does Sabre actually create value? This is how Sabre describes itself today "...through improved forecasting and decision support. This includes a hybrid pricing environment that looks at real-time data from across the enterprise as well as external sources. This provides the most accurate information on customer choice-based forecasting, network revenue optimization, competitor pricing data and configurable business rules automation." Does that sound like anything that any of the above companies do? No, no, and no. None of the current programmatic direct systems actually solve for any of these problems.

For a bit more depth on that, "Improved forecasting accuracy and overbooking optimization with advanced modeling at the segment and fare class level... The forecasts provided include spill estimation and time-based as well as event-based seasonality adjustments. According to forecasted demand, the system overbooks and sets authorization levels higher than capacity by compensating for customer cancellations and no-shows."

Today's media companies face a very different set of problems than the slowness of excel, phones, and faxes. Yes, it is labor intensive. But, that's like saying that the limiting factor in the growth of human construction was the labor intensive work of the stone mason. Yes, cutting stone by hand is very slow and inefficient, but what changed our society was not the electric chisel, but concrete. Even if we have robots cutting stone, building with stone is simply not a scalable method. Building with concrete is. Media sales faces the same problem. The old process simply is not scalable. The current batch of programmatic direct solutions may enable publishers to do it cheaper and faster (stone cutting robots), but no one is claiming to help them do it better and drive more revenue (concrete).

What Are Attention Markets

Let's start with a challenge. Think about 'programmatic'... now stop. The term  is no longer a good description of what is going on in our industry. We challenge you to stop using that word to describe the industry. It's inaccurate and confusing. It's holding back the entire industry by misrepresenting the value propositions of advertising and marketing technologies. The word programmatic is defined as "of, relating to, resembling, or having a program." It means automation. Now, let me ask a simple question, is anyone using real-time bidding doing it primarily for reasons of automation? We would argue that not a single one does.  Automation  is probably last on a list of reasons that includes targeting, impression level decisions, and market driven prices. In today's advertising markets automation is not the cause, it is the effect. Having a place to buy and sell that reflects the wills and desires of market participants is the end-goal. Why are we collectively naming the industry 'automation'? This industry is about the time and attention people are willing to give to a message, it is about understanding economic decisions people need to make and providing them with suggestions.

In reality, something very real is traded in these markets. Its actually not even really media. In the end, it is all about what the advertising stands for. It stands for the time an attention of people you want to reach, that's it. Its about getting your message in front of people. It's about attention. Real-time bidding (also a poorly conceived name), programmatic direct, video, the nascent TV markets, and everything else from digital out-of-home to audio ads, are all members of the larger Attention Markets ecosystem.

Attention markets are what all the significant buyers want and, in many ways, it is also what the sellers want. If both sides can easily understand the value of an advertising opportunity, now and in the future, it is much easier to figure out what the 'markets' think things are worth. The markets are simply the entire collection of all buy orders and sell orders. This is where people's attention is bought and sold. We've all heard the adage "if  you're not paying, you're the product.' Well, these are the exact 'products' that are being traded in Attention Markets.

An impression is a unit of attention, a view is a unit of attention, a click is a unit of attention, and action is a unit of attention, even reach is a unit of attention. In market terms real-time bidding is a spot market, cash and carry. The larger environment is a broader fabric of technology to transact attention assets. Not all are automated.

There is a great report from McKinsey&Company (download link) that helps to put this in perspective. In short, McKinsey & Company estimate that the entire advertising industry is about $1.5 Trillion (with a T) dollars global. That's one and a half million millions! That's 2% of global GDP! And we don't trade this stuff in a market like all the other major parts of our economy? Yep.

So what does all that mean to you right now? Well, buckle your seat belt, the next decade may be the largest technology gold rush since the rise of social media. Let's add a little more perspective, all global oil production in 2013 was $3 Trillion according to research from BP. The entire global oil market is only twice the size of advertising. Stop and think about that for a moment.

How Do You Sell Media You Don't Know You Own?

These days, there is a lot of talk of programmatic tools for transacting media. There is industry wide consensus that automation is important in helping us to move forward as an industry. In a recent post, we discussed the primary challenge caused by process automation, Automating An Outdated Process? Now You Suck Faster. In that post, we discussed how media buying processes have not been significantly updated throughout the industry's massive tectonic changes of recent decades. To follow up on our discussion, we consider another part of the media business that needs a fundamental rethink - the definition of the media being transacted. While real-time impression sales are powered by a robust data environment, the translation of that data into a better understanding of what future inventory is going to look like has not yet materialized.

Most forecasting solutions that currently exist construct a single view of the future. In reality, there is not one future, there are a bunch of possible futures each of which has a different probability of becoming reality. The future is uncertain but understanding the landscape of things that will very likely happen, will probably happen, and might happen can be clearly defined. If we prepare for any of those combination of very likely, probably, and might happen inventory possibilities, we can bring the rich fabric of real-time audience and placement data into the future. Buyers can buy the impressions they want at a specified price before they even show up at the publisher's media.

Today a mid-sized rate card contains a few hundred catalog items and prices, a very large one contains a few thousand. The reality is that there are tens or hundreds of millions of ways buyers buy, e.g. reasons for bidding on an impression. Publisher's need to be able to understand what that landscape looks like. A rate card, even a very complex one, is a very low resolution picture of the impression landscape. It is in that lack of clarity that media arbitrageurs transfer value form the publisher's pocket into their own.

Publisher's have lots of technology and lots of data but do they have the tools that make that data truly understandable to the people who need to make media sales decisions? No! While publishers have supply side sales platforms, these technology merely give the illusion that the value decision making power has been given to their technology. In reality, SSPs relinquish the value decision making to the DSPs. That's kind of nuts for anything but real time impressions.

Optimal transactions happen when both sides have an established value for a transaction and negotiate a final price. The current RTB environment effectively asks the buyers to negotiate among themselves to determine the value of an impressions, hoping that the highest bid is above the auction's floor. Since an impression only lasts for a fleeting moment, all of this makes sense. Impressions in the future don't have that same characteristic. Publishers have months to sell future impressions. This is the fundamental rethink of the solution and problem set.

A platform for publishers that fully empowers their sales teams to sell future media with the full resolution of what the future may look like is the foundation of our platform.

Our DNA

The values we share are what make us successful. Fundamental innovation requires a culture designed for that express purpose and a clear set of values. Believe in competition. Letting the best ideas win inside your team is the best model to achieve success. This is the essence of evolution. Ours is an ecosystem of ideas. Sometimes ideas go extinct, sometimes they thrive. The level of diversity is determined by the dynamics of the system. If we view ideas as merely a resource that is consumed, digested, and excreted, we can throw opposing ideas into "battle" and "let them fight it out." Bring evidence, data, and opinion and have at it. But in the end, we're a team, no matter which idea wins, the team wins.

Prepare for the ups and the downs. Transformational technologies each grow in their own way. It takes time. Think about the worst case scenario, now triple it.  Be ready to absorb that shock, and you'll pretty much never have to worry. Change only happens when the collective consciousness of an industry becomes aware that something new can make things better for everyone. It takes a long time to move an entire industry. It's like a freight train, it is really hard to get up to speed, but once you do its unstoppable.

Facts sometimes only lead to one conclusion. Always be ready to be wrong. If ideas have room to grow and die, the competition can work. Doing that is hard. It takes a lot of courage. A lot of things can go wrong.  Sometimes they go right. Even if your losing keep up the fight. Sometimes ideas really need to 'duke it out' with each other before a winner is clear. Whatever the outcome, if your proven wrong or right, you've learned now move on.

Believe in your team. Enough said.

Guaranteed Media Needs Order Management Systems

Recently, a number of realizations have led to a significant amount of thought concerning how orders are handled in media transactions. Careful consideration has led  to the conclusion that something very fundamental is missing - guaranteed/reserved order management tools for buyers and sellers don't exist. It is as if the technology stack is missing an entire function. And no, programmatic direct is not order management. Yes, there are already a lot of different technologies needed to make things work. So what!? What some in our industry are saying when complaining about the additional technology is effectively "the operating system i use to power my media already has too much functionality..." huh? seriously? That logic reminds me of this ad.


As desktop computers developed, companies created more and more software to solve a huge number of problems for every single business in our economy. People regularly complain about how complicated their computer is and technologists continuously work to solved for that. So why not media? Media is not just some backwater-back-office business function anymore. The media industry is transforming itself from one of the most technologically backwards to one of the fastest evolving. What is missing is the ability to look at everything you need to buy or sell through a single platform. Not ad serving, not data management, not inventory or bid management, not billing, not workflow, not a billing system, not an advertising management system, an order management system. Something different.

All the systems that currently exist are designed to answer three simple questions what do I transact? when do I transact? and for how much? Media professionals have plenty of tools to help with that. When it comes to actually placing an order for some media, "how do I transact?" there is nothing to manage those orders. Managing insertion orders and RFPs is not the same thing as order management.

An order management system provides a common language for transacting, that works no matter what technology you use.

There Is No Such Thing As Too Much Data

Sitting down this morning to peruse my RSS reader, I came to a blog post from someone I respect in our community, decrying too much data and too much content. What is data? when people say there is too much of it, I ask "how did they measure that?" Think about your first video camera, what was the resolution? Mine was 0.1 megapixels, it was a 1987 pxl-2000. This thing recorded video on an audio cassette tape. Even better, it was black and white. Today, I have an HD video camera, 2.1 megapixles, in my phone. What's the real difference between these two pictures? Data.

When you look at a picture, you're not interested in every pixel. You view the data as a small collection of easily identifiable 'things.' You don't analyze it as data but as a single image. The added data between the PXL-2000 picture and the one from a phone camera is very meaningful. If we are to think about data as informing the 'big picture,' we don't know what were missing if we aren't collecting it. Large scale observation data reveals otherwise invisible  interconnections.

Content is just a term for a collection of data that tells a story. Like the difference between a picture's 1s and 0s and this image of a carousel overlooking the Manhattan Bridge. That's how data tells a story.

People have a visual organ designed to sense this type of data, our eyes. You do not think about it as data, you sense it as an image. In this same way, data is one of a business' 'senses,' it is how the business reacts to what is happening around it. The way vision is for human beings.So when someone says 'less data,' it is like they are saying that there is too much to see in the world, so make our vision blurry.

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The meaning of data is often hidden until you have enough of it to make sense of. I believe that our journey in the collection of data has just started. It took mother nature 3 billion years  from the origin of life to the evolution of the first proto-eye 540 million years ago. So yes, we can evolve our technology much faster than mother nature can, but we are still in the very early days. 90% of world's data generated over last two years.

Content generation is 'story telling' based on data. The content is an explanation of what is happening in the data. Saying that there are too many pipes and that increased access will reduce overall quality is quite a statement. Did the increased access of the Gutenberg press reduce overall quality? Did the increased access of the internet reduce overall quality? Sure it did, but so what. A ton of great stuff was also created. Do you consume all the content? No, we find tools to curate it and filter out the crap, and we are all better of for it. So bring on more data and more content, i think the good far outweighs the bad.

In short, we can't know what's there unless we look: collect the data.

Automating An Outdated Process? Now You Suck Faster

When we look at the old ways of media buying and selling guaranteed and reserved media, it is clear that the technologies and methods developed for delivering media have far outpaced the development of new processes to buy and sell that media. Worse still, most of the language of media buying and selling was created in the realm of inventory management. Before media could be bought and sold effectively, the very first pioneers of media technologies created technologies such as cookies and ad servers. This first generation of technologies was not developed to support media buying and selling, it was designed to facilitate an understanding of what, and how much, inventory would be available at some time in the future, to track the activity of users for the media owner to provide a good experience, or other non-transactional reasons.

In fact, no guaranteed or reserved media technologies have been developed from the ground up to uniquely meet the needs of transacting guaranteed and reserved media. Building an transactional environment based on the domain specific language of an ad server is like Amazon building their eCommerce platform using the business logic of the UPS supply chain management system. In other words, the way buyers and sellers communicate about what they want to buy and sell is different than the language that a publisher uses to effectively manage their inventory. Sometimes iterating forward is a good idea. But, if we do not spend the time to investigate when to break away from the old ways, we iterate ourselves into oblivion.

To exemplify this in a way that will hit much closer to home, lets look at how our teams develop software. The computers we use every day and that most of our teams so aptly use to drive our business faced this same exact problem in their early days. The language that the machine used to operate internally is very different than the language that is used by the programmer to write the software. That is why we have to compile our code. When we use Java, C, Go, or any of the other myriad languages to develop our technologies, there is a translation needed between the language used to develop and the language used to operate the computers. In that same way, the language that is used to manage inventory and forecast inventory needs to be translated into a language specifically designed for buying and selling media.

MASS Exchange has built a decompiler that translates the language of inventory management (assembly language) into the media buying and selling language (programming language) and once a deal is done, compiles it back to inventory management language. So back to our title and our analogy. If you have to write code in assembly language, you are using an outdated process that sucks. If you automate that process, instead of creating and intermediating technology, you are simply sucking faster.

Programmatic Is UPS Not NASDAQ

Programmatic is UPS not NASDAQ. There, I said it. But c'mon, enough is enough. In our space, programmatic exchanges are not 'exchanges', private marketplaces are not 'marketplaces', many of the impressions sold are never seen, and many of the audience members are bots.  So what do all of the programmatic solutions do? They are delivery pipes with a fancy billing system. The five major pillars of a market's mission are violated in the current programmatic ecosystem. So, today's programmatic environment is all about managing delivery not creating the ideal environment for buyers and sellers to come together. Continuing with our allegory, UPS only cares that the box gets to its destination, it has nothing to do with its contents nor are they culpable if the seller ripped off the buyer. NASDAQ has nothing to do with getting the good to their destination, they ensure that what is bought and sold is what was represented and at the best price available.

The mission of any transactional environment is comprised of five fundamental pillars: resource allocation, price discovery, protection, reliability, and equal treatment. Without these, market imbalances will make such trading environments untenable.  While some may benefit in the short term, dysfunctional markets give traders the incentive to seek other transactional venues.

Our definitions of each pillar of the mission:

Resource allocation: the purpose of a market is to establish prices so that buyers and sellers can efficiently allocate resources and make better business decisions. If prices are not negotiated within a bidding environment and are not disseminated, how can resource allocation decisions be made effectively if there is no real confidence that the price of the transaction is a fair one?

Price Discovery: Fair and orderly discovery of market prices by traders is key to a market's trustworthiness. Fair and orderly means that all participants are afforded equal treatment, information is provided in a timely manner, there is transparency of market prices, a consistent matching algorithm, fast and easy access, and accurate post trade information.

Reliability: a set of exchange requirements defining integrity, fault tolerance, disaster recovery, recoverability, availability, scalability, and execution speed.

Equal Treatment: Every market participant receives equal access to the exchange and public information is provided to all participants at the same time.

Protection: ensuring that the four other pillars are enshrined in the rules of the exchange, the contracts of exchange members, and the operation of the exchange environment .

This is what real exchanges are all about.