SOURCE: DataXu

DataXu

December 20, 2010 08:00 ET

DataXu MarketPulse: Vendor Neutrality Is Key

BOSTON, MA--(Marketwire - December 20, 2010) - DataXu (www.dataxu.com), the leading media management platform for digital advertisers, today released its monthly MarketPulse research report that explores the data that defines today's digital advertising marketplace. This month's report examines owners' of ad exchanges ability to operate as neutral brokers of media versus independent, neutral Demand Side Platforms (DSPs) that dynamically allocate spend by media effectiveness.

Demand Side Platforms: Vendor Neutrality is Key

As the new interactive advertising ecosystem takes shape, some industry advertisers have expressed skepticism that the owners of ad exchanges can operate as neutral brokers given their ownership of most of the media offered for sale on the platforms. Indeed, Gartner raised a fundamental question in its July 2010 report on "Media Industry Advertising" -- "How long will the ad exchange marketplace overlook conflicts of interest in the current structure and continue to allow the largest sellers of display advertising to operate ad exchanges based on little more than assurances of neutrality?"

An ad buyer can ensure against any seller bias by connecting to multiple ad exchanges and dynamically allocating its buys across platforms and publishers. If an exchange or a seller fails to provide competitive pricing or inventory transparency, the buyer can divert its spend away to a more buyer friendly exchange or publisher offering superior value. After all, it's in a media seller's rational business interest to maximize its own revenue and profit. This can manifest as hidden price floors, data cloaking, selective inventory allocations, and even "simple" buyer workflow tools that implicitly bias spend in the direct of the media seller. 

This is why the market has embraced technology created by an independent company, like DataXu's DX2, to maximize the buyer's return on ad spend. The DX2 system dynamically allocates an advertiser's buy across multiple ad exchanges and publisher inventory sources, automatically placing buys where the advertiser gets the most "bang for its buck." The system analyzes over 30,000 ad placement opportunities per second, and makes adjustments every 0.3 milliseconds. Consequently, when one exchange becomes less cost effective, for whatever reason, the system automatically redistributes the advertiser's budget among other more competitive sellers.

To confirm these dynamics and illustrate how they play out in practice, the DataXu Advanced Analytics Group reviewed the spend data for four different successful Financial Services campaigns, where in each campaign the advertiser hit or exceeded their cost per action goal. The analysis demonstrates that the exchange media mix for each campaign is very different -- no two are alike. Based on real-time neutral science -- ads are placed only where they are proven to drive the best results. See attached chart.

You can download a full pdf of this month's MarketPulse on the DataXu Blog and subscribe to the Report here. All past issues of the MarketPulse are available at: http://www.dataxu.com/tag/marketpulse/.

About DataXu

DataXu provides the leading real-time media management platform for digital advertising campaigns across online, mobile and video channels. With a transformative approach to digital advertising -- combining automated media buying, optimization and analytics -- DataXu helps brands and their agencies use dynamic ad decisioning intelligence for the highest media effectiveness, better operational efficiencies and unique consumer insights. DataXu's executive team unites leading executives in digital media with MIT technologists. DataXu is headquartered in Boston, Massachusetts, and is backed by Atlas Venture, Flybridge Capital Partners and Menlo Ventures. For more information, visit www.dataxu.com or follow us on Twitter at @dataxuinc.

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