Its summer, so like every other year, we make our annual family trip to Copenhagen. Strolling down the beautiful old streets I began wondering if the folks who buy and sell media on a daily basis know that real media trading will probably never include a 3-letter technology in the middle. But, the technology is not the primary barrier to this revolution. The current standard terms of media buying contracts are the biggest obstacle to true media trading.
Buying media via programmatic direct, a la an Ebay style 'buy it now' tile is not trading. Buying impressions via a bid in an Ebay style auction, is also not trading. If you are not buying and selling the same media your are not trading. Real traders make their money by buying and selling, not procuring or producing. Most of today's media buyers are brokers, not traders. The only folks in our industry who actually do any real trading are maligned and ignored by most technology related media types, the media barter agencies.
Real trading in media will look much more like the old fashion and out-of-vogue barter business. Media barter companies make forward investments into goods and services companies such as printers, hotels and hospitality companies to acquire products or services at below the market rate. These are then traded on a $ for $ basis with media owners enabling the barter company to create a margin on media space. Sometimes the barter firms even 'resell' media inventory the agency no longer has a use for, but has committed to purchase. Effectively, barter agencies buy promises to deliver media with payment in many forms.
That being the case, it's time to cut out the messy part of paying for media with airline tickets or cars, for simple promises of cash payments. To do that, we don't need any 3-letter ad tech. The technology for buying and selling promises is very different from the technology to buy impressions. But, the technology to deliver on those promises has been around for over a decade, the 1st and 3rd party ad servers.
When agencies make forward investments in promises to buy media, for which they (and not the advertiser) are on the hook, media trading can become a reality. Today, one of the industries most influential media trade organizations, the IAB, promulgates a standard media contract where agencies are not 'on the hook' - "...Agency will use commercially reasonable efforts to assist Media Company in collecting payment from the Advertiser..."
In order to truly trade, buyers need to be liable for the promises they make and both buyers and sellers need a market mechanism to help determine the price of media 'promises,' based on market conditions.
The first step in accomplishing this goal is to provide for a biddable programmatic direct environment where bids and clearing prices are transparent. A market price can not be truly determined without all market participants understanding what others paid or sold for in the past and what they are willing to pay or sell for in the future.
Real trading can happen when the promise of media delivery is specific enough to drive increased publisher revenues, provide profit opportunity to the trader, and provide better performance to the buyer. If buyers know that they are running their campaigns in a brand safe environment, where real people view their creative, and the expected performance metrics are achieved, they don't really care who the publisher actually is. This is where a trading opportunity exists that creates value for the advertiser, publisher, and the trader, and is a win-win-win.
Real trading only happens when everyone believes that they have a fair shot at winning.