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CBS and Forbes new ad exchange system marks start of online publishing trend


By The Drum Team, Editorial

February 28, 2011 | 3 min read

CBS Interactive and moving to launch their own ad exchanges which are designed to sell lower-priced remnant advertising to the highest bidder, could mark the start of a trend according to a report in the New York Times today.

Their initiatives follows hard on the heels of similar schemes from NBC, and Turner Broadcasting.

The aim is simply to cut out the middleman whose third party networks have dominated this area of online advertising sales in recent times.

While the websites have traditionally sold the higher value inventory, such as banners, the third party exchanges were used to sell the volume ads, which are often taken by the likes of weight loss specialists.

Evidence suggests that those who are taking back control are already chalking up higher sales. Michael Green, a Forrester Research analyst was quoted as saying: “The publishers that are setting the ground rules are making higher CPMs.”

He estimates that the CMP (cost per thousand impressions) value of such ads has been raised from around $1 to $5 amongst publishers who have taken the independent route. And in addition the publishers benefit from gathering and keeping all the associated data.

The new tactics suggest the online advertising market is becoming increasingly sophisticated. Once numbers of viewers were the key. Now advertisers are seeking a particular type of viewer.

“There is significant value in branded data,” said Forbes chief revenue officer Kevin Gentzel, “A Forbes in-market car buyer has more value that just an in-market car buyer.”

The New York Times concludes that the shift is taking publishers back to their advertising roots which involved building a particular audience, in order to sell to a particular advertiser.

NBC Universal vice president summed it up thus: “We’re not selling them (advertisers) placements; we’re selling them people.”

The private exchanges still feature mechanics such as 'real-time bidding' were advertisers can bid on particular audiences at particular times.

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