Earlier this month, I was honored to be invited by our partners at AppNexus to speak at the summit and present Microsoft’s perspectives on exchanges and real-time bidding, particularly from the vantage point of a large publisher and technology company. Below is a quick rundown of what I shared.

I focused my presentation on a few topics including: the rapid pace of innovation throughout the ecosystem through the management of brand considerations for both buyers and sellers, the mitigation of publisher risks like channel conflict via effective inventory and yield controls, and effective pricing and analytics to help enable publishers make more of their inventory available through RTB.

As you’ve probably seen, Microsoft is making large commitments to the exchange space and is focused on helping publishers and advertisers realize the efficiencies of buying and selling media through digital means.

As great as it was to share some of our perspectives on this space, it was even better to hear feedback from peers and partners in the industry. It is invaluable to hear the challenges both buyers and sellers face today as the industry works to improve real-time buying experiences, grow available supply, bring more demand into digital ad buying, and march ahead towards a more fully-efficient marketplace across all types of ads and offerings.

We’ve consistently heard feedback from our customers that they want Microsoft to make more of our inventory available on an RTB basis. We’re proud to now be offering our Windows Live non-guaranteed inventory via RTB in the U.S., but the fact that many others in the industry have remained on the sidelines, continues to reinforce these challenges. In order to succeed, the industry needs to create holistic, technology-enabled solutions to help top-tier publishers fully embrace exchanges as a way to create value for both themselves and their buyers.

As I alluded to above, much of this can be realized through investment in solving for three big considerations:

Smart pricing of ad offerings to alleviate channel conflict and adverse selection.

- Publishers can gain confidence in RTB through appropriate pricing of their offerings on an ad-by-ad basis. This will also increase their participation in this medium, allowing them to expose increasing volumes of their discretionary inventory at winnable prices.

- Advertisers will benefit from the additional scale, allowing them to create meaningful offerings, consolidate spends, and reduce waste.

Flexible inventory and yield controls such that supply and demand can be matched at scale, while maintaining business rules and policies necessary for publishers to auction off their inventories to as much demand as possible.

Brand safety controls for both buyers and sellers that also clear the way for scale transactions in an environment that all participants can feel good about.

- Comprehensive, creative approval processes and controls to ensure safety for consumers and publisher properties.

- Advertiser and publisher opt-outs to ensure the sale occurs only against locations deemed appropriate for the transacting parties.

- Biasing controls that allow publishers to consider all demand against their offerings while maintaining ad quality and relevance for better end-user experiences.

Brian O’Kelley closed the AppNexus Summit last week by thanking Microsoft for “making RTB real”. As flattering as that comment is, we both realize the hard work that is still ahead of us. Though the progress we’ve made so far should not be ignored, Microsoft, along with our partners and customers, is committed to acting upon our vision for the display ecosystem and making RTB a reality for the industry.

For more information, read on about the Microsoft Advertising Exchange.

Until next time,

Esco Strong, Director, Exchange Marketplace Management at Microsoft Advertising

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