Analytics Strategist

November 21, 2011

Ad exchange as matchmaker

Filed under: misc — Tags: , , , , — Huayin Wang @ 9:52 pm

Looking at ad exchange from the matching game perspective can be interesting.  My early post tried to draw some insights from game theory into ad exchange design and practice.

Ad exchange is a platform of matching advertiser’s ads to publisher’s slots for each audience-impressions.  The massive scale of its operation, the technological challenge and sophistication are unprecedented; and yet the basic matching mechanism is under-designed in comparison to traditional matchmaking. There are so many things that publisher care about which ad will be shown on their sites, not just what’s is the highest bid price; yet, the within current ad exchange design, there is no opportunity for publishers to express their preferences fully.

If ad exchange were a matchmaker, what it would be like?  Imaging publisher as bride and advertisers as potential grooms – our ad-exchange-matchmaker goes to a bride and say,

M:  Let’s put it out there and see who will be the richest man coming here for you

B:  But I am scared of marrying one I do not know”

M:  Well, you can give me a black list and tell me what you do or do not like as filters

B:  Can I pick it myself?

M:  No, I will pick one for you –  based on wealth

Now you get the idea of the frustrations of our publisher/bride.  There need to be a process for publishers to perform data-driven ads evaluation based on their objective and value, not just bid price.  About publisher concerns of ad exchange and RTB,  Brian O’Kelley discussed here on ClickZ.  A better designed matching mechanism should handle publisher’s preference properly, which may ease some of the publishers’ concerns (channel conflict, data leak and brand safety) if not solving them.

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