Launched in 2005, the Right Media Exchange is now the world’s largest ad trading platform. Billions of ad impressions are bought and sold using its technology every month – and it continues to attract more non-premium inventory from publishers and ad networks. Right Media’s dominant position in the market has required ad traders to make it an essential part of their exchange strategy.

But how does the trading platform actually work? How does it benefit buyers and sellers? Can it ensure brand safety? And can it provide adequate levels of liquidity to prevent wild fluctuations in ad pricing?

Roger Williams, Director of International Marketing at Right Media, spoke to FarneyMedia this week. Here he provides an overview of the RMX platform, how it’s becoming an important sales channel for publishers, and how it helps media buyers improve the performance of ad campaigns:

Can you explain how display advertising is traded on the Right Media Exchange platform?

The Exchange is a technology platform that is designed to bring buyers and sellers of online advertising inventory together (publishers, advertisers, networks and agencies) in order to trade inventory more efficiently via a real time auction.

It offers a common, global, online auction-based trading platform, where buyers and sellers of digital advertising can be inter-connected. Price is driven by market forces, making the whole process faster, easier and more transparent, helping eliminate many barriers to business and removing traditional inefficiencies.

Sellers define which inventory they wish to monetise via the platform and what pricing model(s) they will use to sell and then place it on the Exchange. Buyers establish their targeting criteria and how they wish to purchase (e.g. flat CPM, CPC, CPA or dynamic CPM) and then bid to buy relevant inventory as it becomes available, impression by impression.

The auction creates an environment in which each bidder has equal access to the media, so relationships and budget sizes do not distort the workings of the platform.

How does the Right Media Exchange benefit publishers?

In the first instance, it provides a mechanism for monetising a publisher’s inventory as effectively as possible, helping to ensure there is always a buyer for its inventory. As the Exchange drives demand through competition for each opportunity with the highest bid winning, this should help drive up eCPMs and also help ensure that a publisher maximises its site yield.

By defining and operating its business and relationships on a single platform, a publisher minimises the operational workload through automation, helping increase the efficiencies of its ad operations.

The Exchange is also fast becoming a solution to enable publishers to further develop their business. It gives publishers real pricing flexibility, allowing them to offer any pricing model through a single platform – from standard CPM through to performance pricing. This enables them to bring to market new offerings, especially the performance-related ones that today’s advertisers are demanding. By developing these offerings, they can help secure a greater share of budgets.

Publishers are also using the platform to drive additional revenues by selling high value targeted audiences to advertisers across the entire Exchange. A number are even beginning to take things a step further, using the Exchange technology and the ability to link to other partners to develop their business into a network in its own right.

How does the platform benefit media buyers?

For a media buyer, the Exchange offers greater access to a wealth of inventory. By moving from targeting individual sites to targeting specific audiences, advertisers can open up a campaign’s reach, embracing opportunities they may have never considered. Couple this with strong visibility into and control of pricing, performance and global frequency, and the result should be more successful campaigns.

Through our Dynamic Pricing option, the price an advertiser pays for an impression is tied directly to the value of the impression. With traditional fixed price approaches, advertisers are forced to pay the same amount for every impression even though not every impression is of equal value. On the Exchange, an advertiser pays for what the impression is worth to them, helping ensure they never overpay.

From an optimisation perspective, the automated nature of the Exchange means the system learns where a creative performs well across different sites and sections. Based on performance, the system will automatically focus budgets on creatives that are generating the best return, helping optimise campaigns much more quickly.

What differentiates your exchange from other European trading marketplaces?

Most importantly, the unprecedented liquidity that exists across the Exchange. For any exchange – be it selling stock, commodities or advertising – liquidity is the key driver to success. With over 100,000 buyers and sellers driving eight billion transactions daily at a global level, the Exchange helps ensure there is a buyer for every auctioned impression. This liquidity provides huge reach and scale for campaigns at a national and international level, helping provide real roll out opportunities for advertisers.

Right Media has developed a wealth of tools to maintain and help enhance the health and safety of the Exchange. This includes Creative Tester, an automated tool that helps detect technical attributes in ads, including malicious attributes, and Media Guard. Media Guard establishes a single system of Exchange classification to help address publisher sensitivities around different types of ad content and behaviour and it also features a human review component.

For advertisers, the Exchange offers a pure performance tool that combines our unique auto-optimisation technology with access to a large volume of inventory.

Finally, we offer a proven solution, with over four years experience in building and operating a global exchange.

Given your scale, are there opportunities for European publishers to monetize their international traffic?

Indeed there are. The global nature of the web means many publishers now have significant overseas audiences but often don’t know how to monetise them successfully. Whereas traditionally they may have let their international inventory go unsold or farmed it out to third parties with a ‘something is better than nothing’ approach, our global Exchange platform means we can provide a solution, allowing publishers to turn their international traffic into a new revenue stream.

Ad exchanges require equal numbers of buyers and sellers to prevent big fluctuations in ad pricing. How does Right Media provide liquidity in its exchange?

A successful exchange requires balanced demand and supply. We regularly review the exchange on a market by market basis to ensure we have the right mix of buyers and sellers to offer balance and stability. When bringing on new clients, we work to ensure that they fit the profile of a company that would operate well on the Exchange, based on the then Exchange dynamics.

How does RMX ensure brand safety? Can you help safeguard against inappropriate ads appearing on a publisher’s site?

There are a host of controls in place on the Exchange to help minimise the issue of ad misplacement.

The first relates to standard business practices. Just as in the offline world, brands need to control who they work with and how they work with them. The Exchange puts this control in each company’s hands as they decide which partners they will (or will not do) business with.

As well as defining who they want to have a direct relationship with, Exchange members need to have the ability to define what is and what is not acceptable for their brand.

The wealth of targeting options available helps ensure the advertiser can correctly define the audience it wishes to reach – from geography and language through to channels, sites and even specific publishers. At the same time, they can define where they do not want their advertising to appear, including banning specific content, inventory types, sites and publishers.

In addition to Media Guard, as more brand-conscious advertisers are investing more of their marketing budget online, we have developed Marketplace Select – to allow media buyers to view an ad network’s or publisher’s site list and select which sites they would like their advertising to run. This is designed to give brand advertisers greater visibility and control as to where their ads will appear, giving them greater confidence when using the Exchange to help reach their audience while maintaining their brand integrity
Do you think that perceptions are changing towards non-premium aggregating platforms? Have you seen a change in attitude from media buyers and sellers towards performance based media and ad exchanges in general?

Whereas in the past very few publishers had a strategy for their non-guaranteed inventory, mainly because it was very difficult to monetise, exchanges like ours are helping to give them greater control of their total inventory. As a result, non premium inventory is becoming a valuable revenue stream for them.
This year we have found a real shift towards performance marketing, as spend accountability becomes key. This is helping to drive both the interest and acceptance of exchanges as a solution.

Does Right Media have any plans to roll out real-time bidding on its exchange in Europe?

We are always looking at the needs of the market and what developments would be right for the Exchange and our members.

The Right Media Exchange platform is available globally. Where do you see the growth markets for ad exchanges in the next twelve months?

Even in what you would consider the more mature online markets, like the UK, the exchange concept is still relatively new. As a result, Europe for us still offers great growth potential. For other markets, for example in Latin America and Asia, it is often a question of working initially with the earlier adopters as the right market conditions for an exchange to begin to emerge. In these markets, education is very much key. We are also beginning to see a lot of movement in Southeast Asia and the Middle East.