Future of Online seminar: VERY mixed views on Ad Exchanges and Ad Networks

Ad networks and ad exchanges were seen – not entirely surprisingly – rather differently by the panellists at MediaTel Group’s Future of Online seminar on Friday.

Simon Daglish, vice president and commercial director at Fox Interactive Media, was unconvinced by either model – he didn’t get the business model for passing his inventory to someone to sell at a lower value, as he put it. Daglish explained to the audience and chairman Torin Douglas that MySpace is no longer working with ad networks.

As the industry struggles with over supply and yields, Google remains the very notable exception. The essential disruptive nature of the internet has contributed to this, said Dominic Allon, agency leader at Google, with new technology allowing “the definition of ‘media owner’ to be redefined”.  He also predicted that there will be an increase in competition over the next few years because of the rise of ad exchanges. “That is something to watch and it will reshape the debate,” Allon said.

It was not a reshaping that appealed to everyone. Paul Wright , formerly at Bauer and Sky, and now ADTECH’s VP commercial, Europe, saw yields being hit even harder by real-time exchanges. Already there are agency-owned networks where some “vigorous” debate is going on with media owners, keen to avoid these and protect whatever premium pricing they have, and Wright cautioned that there is a massive drop in pricing between an ad network and an ad exchange.

Clearly Google sees this as a growth opportunity, but Allon’s justifications were less convincing on this occasion.