Ad Exchanges Present Hurdles for Rich Media Firms

About a year ago, more than half of PointRoll’s expandable ads bought through exchanges or non-guaranteed real-time bid systems never made it to their destination. Today, expandable units are enabled more often when bought through exchanges, and that default rate is closer to 30 percent.

Still, the popularity of ad exchanges and adoption of real-time bidding through exchanges are creating challenges for rich media ad firms and advertisers.

pointroll-robgattoAccording to Rob Gatto, CEO of rich media ad company PointRoll (left), it’s not always easy to run expandable ads when bought and targeted through ad exchanges. Part of the problem is technical. Iframe ad tags employed on many websites can restrict the expanded portion of rich media units, meaning a non-expandable default flash ad is served in its place.

“Rich media has a tough time breaking through all those iframes,” Gatto told ClickZ News.

The typical exchange buying process also contributes to the expandable ad dilemma. According to Gatto, neither the trading desks where agencies conduct media buying, nor the DSP technologies they use to enable it indicate whether or not inventory will allow for expandable units.

Some exchanges are more accepting of PointRoll’s expandable units; Gatto named ContextWeb and Collective among them.

At this stage, brand advertisers – the ones most likely to use expandable ad units – aren’t buying a significant amount of inventory through exchanges, said Jason Bigler, SVP of products at Collective, which runs an exchange focused on higher quality inventory. “If you’re a big brand you’re still not sourcing as much through an exchange as, say, direct response advertisers,” he said, adding that the obstacles for rich media ads in exchanges “are more a function of that than of a technical limitation.”

Innovations in display advertising happen at such a rapid pace, the expandable ad hurdles could be temporary. “By Q4 we will have a handful of places where you can by real-time expandable inventory,” said Gatto.

Whether brand advertisers continue to include non-standard ads in the mix could depend on how expandable units compare to non-expandable ones in campaign measurement and brand impact studies, suggested Gatto. “They’ll have to review performance,” he said.

In the same way that verticals differentiated ad networks, exchanges could also be diversified, predicts Gatto, who believes publishers like Yahoo and PointRoll’s parent company Gannett could create private or vertical exchanges specializing in rich media. “I see some private exchanges on the horizon for rich media,” he said.

Bigler agrees exchanges will move in this direction. “I think if we’re going to get brand advertisers to really scale their buys in the exchange world we’re going to have to do that,” he said.

With greater reliance on display ad automation, Gatto asked, “Are brands sacrificing some benefits of display in order to get automation and a cheaper price?”

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