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MarketingVOX: DoubleClick is setting up a Nasdaq-like exchange for buying and selling online banner ads, bringing together web publishers and ad buyers on a website where they can participate in ad auctions, reports the New York Times.
DoubleClick, which seeking to be acquired, says within five years the DoubleClick Advertising Exchange could produce most of its revenue. "We already have the largest sellers and the largest buyers," CEO David Rosenblatt is quoted as saying. "This will link them for the first time."
The exchange will let advertisers see what competitors bid for particular ads, and it will let publishers attempt to sell their ad inventory at the highest possible price. DoubleClick has signed up 35 publishers, advertising networks, agencies and advertisers to test the system, which is expected to launch in the third quarter.
Forrester Research analyst Shar VanBoskirk says DoubleClick is a shoe-in to lead in the exchange market - a natural fit - and it's poised to dominate the space and leave first entrants (Right Media) in the dust, if it moves quickly enough.
The news certainly makes DoubleClick a more attractive acquisition. Both Google and Microsoft are reportedly courting the company. Its owner, private equity firm Hellman & Friedman, is apparently asking for more than $2 billion.
In its announcement, DoubleClick said buyers and sellers, in an effort to sustain the growth of their online advertising programs and to increase operational efficiencies, have been looking for new methods to generate additional revenue.
It cites a recent study by Forrester showing that 25 percent of online advertising inventory is never sold. Another 15 percent is sold off as remnant and even more is undersold. Moreover, buyers struggle to find the most efficient way to access and selectively target the inventory they want, at the right price, DoubleClick said.
"The DoubleClick Advertising Exchange service solves both problems by providing advertisers, agencies, publishers and ad networks with a dynamic marketplace where they can buy and sell online display advertising - impression by impression - with greater efficiency, transparency and control," DoubleClick said in its statement.
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