mexad, a pan-European exchnage-buying specialist, have just launched in the UK. Managing Director, Sacha Berlik, took time this week to speak to ExchangeWire to discuss DSPs, European exchange-buying and how mexad are achieving such strong numbers in campaign performance for its agency clients.

Can you give an overview of the service mexad offers advertisers and agencies?

SB: We offer a comprehensive bid management service across multiple ad exchanges in the European market.

What exchange platforms are you currently buying from?

SB: In January 2010 mexad's exchange buys had the following percentage breakdowns: 64% Right Media, 23% Google/DoubleClick ADX, 13% others (e.g. Rubicon, OpenX). It varies by country, and these numbers are an average for ad exchange buys across Europe.

You currently offer a similar service in Germany? How has it improved campaign performance for advertisers there?

SB: Our head office is in Germany, but we already work with agencies and advertisers in Germany, Austria, Switzerland, Italy, France, Poland, Spain and the UK. We opened offices in London and Vienna in January 2010 - and we intend to open two more European offices in Q3/2010.

It is easy to measure campaign performance. Ad Exchanges are directly linked to the so called spot market of unsold inventory. Everyone, including ad networks, are buying from this spot market.

We buy on behalf of our clients with full price transparency through Ad Exchanges– no arbitrage, Our campaign performance is 25%-70% better than ad network campaigns - and this has been proven in more than 250 campaigns so far.

Due to the fact that our margins are more like a PPC agency than an ad network, it is essential for mexad to use its own technology via multiple APIs to improve the optimisation process.

Effectively we cut out one player in the value chain of unsold inventory: namely, ad networks focusing on non-exclusive media buys.

Will this ad exchange trading experience transfer easily to the UK market?

SB: Our business is driven by technology and in depth knowledge of the quality of publishers’ inventory available in ad exchanges. Since Q3 2009 we have been working with three international UK based agencies on pan European campaigns. Actually, we don’t think in countries – we think in campaigns.

Clients in the UK are no different than other clients when it comes to measuring success. They are arguably more sophisticated. UK agencies are setting standards for media planning across Europe, and we are already measured by it.

Do you think agencies and advertisers are ready for the exchange-buying model? Are agencies and advertisers now seeing the benefits of running ad campaigns across the exchanges

SB: Agencies are ready for the exchange buying model. What we see is a lack of experience in ad exchange buying. We always suggest to buy with us in to help unlock the value of the spot markets.

Our optimisation experts have been buying across ad exchanges since 2005. While technology can be built within 3-6 months or licensed, it takes time to build up knowledge and experience to be successful.

Do you think that online display is becoming more like search

SB: It is similar to search buying. The buying model is getting closer but the means for advertising are still very different.

How would you differentiate mexad from other exchange-buying specialists in the market?

SB: We are international, and are technology driven. mexad has an in-depth knowledge not just about the media available, but also about the algorithms of ad exchanges. The company has also strong experience in European ad exchange-buying: so far more we have run 250 campaigns across eight European countries. mexad has very much an engineering approach - and we feel best being measured on results.

Do you think the arrival of Demand Side Platforms will allow advertisers and agencies to buy online media more efficiently across the European market?

SB: We strongly believe in DSPs and their ability to make display media more effective. However, if you have more than three in a market you will still need a specialist to use them to their full potential.

How do you see the display market and the exchange space developing over the coming twelve months?

SB: Most likely we will see a similar movement to what happened in the search market between 2001 and 2005. Some agencies and advertisers will use DSPs to run their own campaign and gain some experience. Most will use specialists like us. Overall the use of exchanges will increase significantly, and we will see more advertisers and agencies using service models like mexad to buy across these platforms. 2010 will definitely be the year of the ad exchange.