Ninemsn and Microsoft launch ad exchange

An advertising expert says small businesses could potentially benefit from an advertising exchange to be launched later this year by Ninemsn and joint venture parent Microsoft.

The exchange, likely to be named the Microsoft Advertising Exchange, is the equivalent of a virtual stock exchange for buying and selling online advertising.

It could include Ninemsn advertising inventory, advertising from third party websites already selling advertising space through Ninemsn and advertising space on a range of Microsoft Advertising products including Microsoft Media, Hotmail and Windows Live.

Ninemsn chief executive Joe Pollard said more information will be made available later in the year, but confirmed that the company will represent third party inventory.

Advertising exchanges in the United States have marketed themselves as a way for internet publishers to boost the price at which they sell leftover advertising space by enabling advertising agencies and other buyers to bid for advertisements in a real-time, auction-style marketplace.

Paul Fisher, chief executive of the Interactive Advertising Bureau, says the advertising exchange concept emerged very quickly in the US and agencies in Australia are just starting to get in on the act.

“We’re starting to get a greater fragmentation (of the market), which creates both opportunities and challenges. I think that if small businesses have access to the exchange then yes, it would be (of benefit)” Fisher says.

“Possibly more businesses will have access to inventory or the buying process that they otherwise might not have but it comes down to what inventories are on these exchanges and who has access to them.

“In one sense it will create more opportunity for advertising and publishing networks. In another sense it will create greater fragmentation of the buying market.”

Fisher says the fact that the exchange will enable buyers to bid and buy on a real-time basis requires a new set of training and skill set developments across web publishers and media agencies.

“Ultimately businesses should be educating themselves on the buying of inventory and ask themselves how does it tie into achieving my marketing objectives?” Fisher asks.

“My advice to businesses – whatever their size – is to have a sound marketing strategy and a channel-planning strategy and execute that strategy in the most cost-effective way they can.”

Fisher’s top tips for businesses in relation to advertising exchanges:

• Treat it as a channel, not a silver bullet to your marketing problems. It is a mechanism for more efficiently building you media inventory – that’s all.
• Talk to exchange providers about how to interact with it. If you’re a business call the management team and ask for advice.

Fisher says it is important for business to remain level-headed about the new advertising exchange, describing it as just another piece of technology.

“It’s really providing a central marketplace for the buyer … it’s about simplification. It won’t help you launch a new shampoo or a new car or a credit card – unless it is part of a smart strategy,” he says.