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> Interview: Zedo CEO Roy de Souza Discusses
Ad Exchanges in the Current Marketplace
Interview: Zedo CEO Roy de Souza Discusses Ad
Exchanges in the Current Marketplace
May 16, 2011
As part of our “Experts
Talk” series of interviews, we have asked
Roy de Souza, co-founder and CEO of Zedo, to clarify
a few aspects on how ad exchanges work and where
they are heading to nowadays.
Otilia Otlacan: Ad exchanges
are a hot topic these days, and, as you so clearly
explained 1, they may overtake ad networks in
terms of agency buys. Still, there are many in
the online media arena who aren’t too sure
on the difference between the two. To start with,
could you give our readers a clarification on
what distinguishes an ad exchange from an ad network?
Roy de Souza: An advertiser can
think of an exchange as an Amazon.com type site
that sells advertising space. Agencies go there,
see what ad space is available and buy it.
Otilia Otlacan: There is a gap
– at least a perceived one – between
technologies employed by ad exchanges and those
commonly seen in ad networks. Do you think this
is indeed the case, and if so, what could be the
driver for the discrepancy?
Roy de Souza: Ad networks were
usually started by great sales teams. They are
very good at selling to agencies. That is their
strength. Ad Exchanges like DoubleClick Exchange,
ZINC Exchange and OpenX Exchange were started
by ad serving companies. Ad serving companies
are sophisticated and technology companies with
huge scale. An exchange is sophisticated technology
that also offers the ability to buy ad space –
so even more complex technology. As the the industry
started seeing advantages from exchanges, it was
far easier for the ad serving companies to build
an exchange than for the excellent sales reps
to start writing software.
Otilia Otlacan: We have seen
how beneficial ad exchanges could be for large
media buyers. What about publishers, what’s
in the store for them?
Roy de Souza: Publishers can
and should benefit too. And they will. Currently
most ad exchanges sell only remnant space. They
don’t pay the publishers much more than
remnant ad networks so publishers don’t
benefit much. However new premium exchanges such
as ZINC Ad Exchange sell premium not remnant.
They get high prices for the publishers and the
publishers will benefit. Because there are so
many advertisers across the world the premium
exchanges will find them and bring new advertisers
and money to publishers.
Otilia Otlacan: While still
in the publishers’ zone, what is your take
on yield optimization companies vs. ad exchanges?
Are yield optimizers morphing into ad exchanges?
Roy de Souza: Yes. Yield optimization
companies are good at optimizing remnant space.
They are morphing into remnant exchanges that
sell remnant space on an auction basis.
Otilia Otlacan: You have launched
ZINC – Zedo’s own ad exchange –
three months ago. What differentiates ZINC form
other ad exchanges? Could you share with us what’s
on ZINC’s roadmap for this year?
Roy de Souza: ZINC has been launched
in private beta. It is for advertisers and agencies
that want 100% transparency and guaranteed impression
delivery. It sells only professionally created
content sites in the news vertical. It also sells
new ad types that are noticed by users. Agencies
love the UI and the efficiencies from automating
their media planning and buying. They are impressed
that before buying they can see full availability
data, prices and unique users their media plan
will reach. This type of inventory is very attractive
to agencies that are launching a new product or
service or trying to make a big impact. The ad
space is a little more expensive than remnant
but agencies find that their clients are very
happy with the results. Later this year we will
add more high quality sites, add further innovative
ad types (one on the iPad) and more targeting
options like day parting. We will also launch
ZINC internationally as we are seeing demand from
agencies outside the US.