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Microsoft making the right moves to stay #3

July 26th, 2007

Microsoft has bought adECN. Still sitting in your chair? Yup, the ‘exchange’, which in reality is just the network ExperClick, was acquired by Microsoft today. I’m really at a loss as to what to say. AdECN isn’t really an exchange, more a loose consortium of ad-networks, and loose in the sense that they’re primarily based around one single ad-network. Why buy a crappy exchange instead of building on top of DrivePM, one of the top ad networks in the US?

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Posted by Mike Filed in ad-exchanges, adecn, microsoft
3 Comments »

  • http://offtheisland.com Cam

    This was by far the funniest news I heard all day!

  • Rob Merrill

    Hey there,

    I commented once before and continue to think of your blog as one of the most insightful takes on online advertising. However, have to disagree with you here.

    I think we can all imagine a future where ad exchanges become the first stop for publisher inventory, which will be bid on by both networks and large advertisers/agencies. If this is the future, then AdECN is probably a loser–it doesn’t make sense for a network to bid on an ad call it can’t fill (or can’t fill economically). Why would you need a secondary market for something with a max shelf life of 500 milliseconds (or less)?

    If, on the other hand, the brave new world we might imagine doesn’t come to pass, AdECN could make a lot of sense. If ad networks maintain their publisher-facing role, then you can make the case for a liquidity provider such as AdECN.

    Furthermore, if AdECN gains traction (which could be easy, once Drive and 1 or 2 others come on board), Right Media could face some difficulties. How much inventory on RMX comes from networks? I have no idea. I would guess maybe half. The networks who bring inventory onto the exchange are generally lower tier networks, who are receiving ad call defaults from the big players in the market. If those big players decide to start sending defaults to AdECN instead (and manage to sell their publishers on this idea), then RMX would probably lose a significant chunk of volume.

    Also, AdECN no longer operates ExperClick, according to what I’ve heard. I thought that was just the network they were running in order to refine their tech and prove the concept. While most of the nets operating on AdECN are cats and dogs (you could probably say the same about RMX, with the exception of Traffic Marketplace and CPX Interactive), MSFT’s announcement that it will integrate Drive with AdECN could seriously catalyze that platform.

    Just my take. I still think RMX and DCLK AdEx will probably divide up the market, but AdECN probably has an outside shot at being a big deal.

  • Mike

    Rob,

    You definitely bring up some good points. Indeed a top tier network such as Drive would greatly boost AdECN. Also, access to inventory is probably the greatest challenge of any ad-exchange. From what I’ve seen advertisers tend to follow the good inventory, which means that the first exchange to get a vice grip on supply will have a huge advantage. Where I disagree with you is that Networks will continue to keep the publisher facing role. Right Media’s “Direct Media Exchange” (direct.rightmedia.com) has been great in getting direct access to smaller publishers by offering them free adserving. These are the guys who would normally work with Adsense or a few of the larger ad networks and maybe daisy-chain down to the ‘cats and dogs’. This is where DoubleClick has a huge advantage over all the competition as they already serve as the primary adserver for the majority of top-tier publishers, and lets be honest, that’s where the real money is. Whomever is integrated with the source of supply as a primary adserver becomes almost impossible to beat.

    Thx for the great comment.

    -Mike