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29 March
2017
Digital Advertising
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Digital Advertising and Wall Street

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Everytime I have to explain what Programmatic is, I use the financial industry particularly stock exchanges as an example.

I explain that Programmatic buying of digital advertising inventory is like trading stocks in an exchange. Stocks were sold to the “public” by stock brokerage firms such as Merrill Lynch, Smith Barney, and others. You called your stock broker and you said you wanted to buy IBM, Apple, or Google stock at market prices or you could set a price and see if the transaction would close at that price. This was the only way an individual client could buy or sell stocks. About 20 years ago, platforms such as E*trade were created, enabling anyone to buy or sell stocks electronically without talking to anyone.

Programmatic digital advertising platforms are like E*trade: instead of buying stocks, you are buying advertising inventory and you can select your target audience and in some cases even the sites where you want to run your ads at.
By now this is nothing new – programmatic is a trend in our industry that started with Overture and its bidding platform for Search terms about 15 years ago. What I think is new is that using the financial industry as an example to explain Programmatic is becoming more and more relevant.

Recently, NASDAQ announced the launch of The New York Interactive Advertising Exchange (“NYIAX”). NYIAX will focus on digital inventory that is NOT sold in real time, but rather weeks or months in advance. This inventory will be sold as standardized securities, whereby Buyers have a guaranteed contract to use that inventory during a specific time. Initially, this exchange will only sell digital ads but soon will expand into TV, Print, and OOH.

Why partner with NASDAQ? Well, it has the tech infrastructure and expertise in closing transactions securely. Plus it will use blockchain technology for added security. As digital ad inventory looks more and more like a tradeable security, it was a matter of time for the financial industry to get in the game. And as digital advertising also becomes more tech-and data centric, watch out for the IBM’s, Oracle’s, and Accenture’s of the world, but that is a subject for another blog.




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