Wednesday, April 04, 2007

DoubleClick Unveils 'Nasdaq' Plan For Advertisers

DoubleClick Unveils 'Nasdaq' Plan For Advertisers

by Joe Mandese, Wednesday, Apr 4, 2007 8:00 AM ET

DOUBLECLICK, THE AD-SERVING GIANT THAT dominates the online advertising business, today is expected to announce plans to develop an open market exchange for buying and selling digital advertising inventory much like Wall Street's Nasdaq exchange. News of the plan, which was first reported in today's edition of the New York Times, comes amid a renewed interest in online media buying exchanges, and also as potential suitors like Google and Microsoft begin circling DoubleClick, which has been put on the block by its owner, private equity firm Hellman & Friedman.

The concept of a Nasdaq-like exchange for buying and selling media is not new. It was first proposed by Julie Roehm two years ago during an address at the Association of National Advertiser's Television Advertising Forum in New York, when the controversial marketing executive was at DaimlerChrysler and before she had joined Wal-Mart. Roehm's idea took root and has generated some of the greatest traction on Madison Avenue to date, and has culminated in the test of the so-called eBay Media Marketplace later this year.

eBay was given the assignment to develop the infrastructure for creating an open market exchange after members of the ANA and a steering committee heard pitches from companies including DoubleClick and Google.

To date, Google has been most successful in establishing what effectively is an open market exchange for online search ads via its AdWords system, and has begun incorporating radio advertising time into it and now plans to add TV advertising inventory as well, via a deal with satellite TV provider EchoStar.

The sudden explosion in online buying exchanges is reminiscent of a period during the late 1990s when big players ranging from to Media Passage and even Enron tried but ultimately failed to make a market around buying and selling media time and space online.

But DoubleClick has what appears to be a running start, because it already controls a critical mass of the server market for online advertising and manages the reporting and accounting systems for many of the biggest online advertisers.

While the ad serving marketplace is almost entirely around online advertising, it is expected to become a big factor for other media as their inventory becomes digital and can be delivered via computer-based ad serving systems. Many believe Google's moves into traditional media presage that, and DoubleClick's chief online ad serving rival, Aquantive's Atlas unit, has been pushing into the video ad serving market with an eye toward managing advertising on television digital set-tops.

According to the New York Times' report, DoubleClick likened its new exchange system to a "mix of eBay and Sabre," the airline industry reservation system used by travel agents, which is also at the core of many consumer booking systems like Orbitz and Travelocity.

"The service will let advertisers see information about what competitors bid for particular ads, in the same way that eBay shows visitors past bids," the Times reported. "And it will let publishers try to ensure that they sell their ad spots at the highest possible price, the way that airlines try to do with the seats they sell."

The exchange is the latest chapter in what has been a storied company that begin in the mid-1990s as spin-off from Poppe Tyson, a unit of one-time Madison Avenue giant Bozell, Jacobs, Kenyon & Eckhardt before it was turned into high-flying publicly traded Internet darling DoubleClick, whose shares ironically were traded on the Nasdaq exchange.

In 1995, private equity firm Hellman & Friedman acquired DoubleClick and took it private again.

Joe Mandese is Editor of MediaPost.


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