I participated in a webinar sponsored by DataXu discussing how the development of display ad exchanges will make real-time bidding for display ad units and impressions similar to the current SEM process by making it more open, targeted and technology driven. I attended the webinar because of the increasing interest of local media publishers in how they might take advantage of these emerging platforms to offer display advertising similar to how they offer SEM. 

Bruce Journey, DataXu’s chief revenue officer, pointed out that “the available inventory of online display advertising is growing exponentially based on the number of outlets and the number of available impressions. As of today, on a monthly basis, there are 300 billion impressions available, which will grow to 1.5 trillion by 2010 indicating a tremendous amount of inventory that could be sold.” 

Companies like DataXu and others are adding behavioral and segmentation analysis to the process to better target potential customers and to have a better understanding of buying intent. As Journey explained, “highly researched categories such as automotive have a significant cookie trail to indicate areas of interest and intent. The new behavioral research allows agency buyers to look for patterns and make smarter buying decisions.”

While most of the inventory being sold via ad exchanges is the basic banner and leader board units, the ability to place ads across a number of sites and ad networks makes this an appealing segment to build revenues either for a publisher or an agency.

Mike Baker, CEO of DataXu said: “The greatest value to a publisher in an ad exchange is the ability to move inventory in order to maximize revenue potential on their sites. By enabling a larger pool of buyers via a real-time bidding platform, publishers increase their ability of moving and selling inventory at a higher price point.” 

The real question in my mind is can this automation and decentralization of display unit buying be offered to the local small and medium-sized business interested in brand or promotional advertising. Adoption of SEM has certainly increased at a rapid pace thanks in part to directory and newspaper publishers, begging the question, could directory, newspaper or other local media sales teams get into the real-time bidding game by offering display advertising to their existing advertisers? Leveraging existing relationships with Yahoo and Google and partnering with real-time bidding platforms could create this very scenario. As these systems mature and the measurement becomes more refined, display ads from the local plumber and florist could be viewed side by side with major brands.