A New Model For Trading Ads - It's Not RTB

Why do we trade? Why do we 'gather' in electronic marketplaces to exchange goods? In buying and selling those everyday things we need to run our business, we want to make sure we are getting offers from as many buyers or sellers as possible. We do that because we want to know as many offers as possible, we want to figure out what would be best for us to buy or sell, and we want to figure out what would be the best price.

The world of media buying and selling today is predicated on the notion that a specified piece of inventory can be predicted to clear at a specified price. Publisher's predict their prices and buyers predict theirs. Each side believes that it can predict "a price." The problem is that media is sold, not in units, but in classes. Each way to package inventory can generate a different price for each package. The same inventory can be section targeted, included in a run-of-site unit, or in a run-of-network. How many ways are there to package inventory. Does each package deserve it's own price? If so, then we should think of all the prices at which inventory may clear, as a portion of any other package.

What traditional media buying and real-time bidding share is the idea that 'a single price' corresponds to 'a single piece of inventory.' But, is that the right way to think about it? could there be a better way? What if we looked at this problem from a different perspective? what if we changed the point of inquiry? There is another way to look at media transactions. What if we looked at media from the perspective of measuring value? Measuring value is clearly defining the parameters of what is bought or sold. Price is easy to measure, it is just a number on a linear scale.

What it all means is that to think about the media differently is to think about media inventory in terms of the demand that it satisfies and not in terms of the supply that it provides. Mapping supply to demand, or in other words matching orders between buyers an sellers, requires the we use the same language to describe the supply and demand. To do that, any demand with a set of criteria should match any supply with those attributes.

That's the new model. Think about media inventory in terms of the demand that it satisfies and not in terms of the supply that it provides.