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Will Ad Networks Compete for Your Ads?

samzenpus posted more than 8 years ago | from the pick-me dept.

48

bokelley writes "TechCrunch has an article today about a new product called RMX Direct that holds a real-time auction for every ad on a site. Networks and advertisers bid based on the quality of the user (geography, site, time of day, etc). This could be game-changing for sites and blogs; if networks have to compete, will we see AdSense disclose more about its payouts to publishers? Will other networks like Advertising.com and ValueClick participate, or will they continue to force publishers to make hard choices? In a lot of ways, this has similarities to the challenges that Linux faces in a Windows world. The open source community has been fighting for more than a decade to make the progress it has, and we're not there yet — will online media be different?"

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AdSense already does this . . .? (1)

James_Aguilar (890772) | more than 8 years ago | (#15902138)

I thought Google Adsense already did the whole real time auction thing. This article [blogspot.com] seems to confirm the idea.

Re:AdSense already does this . . .? (3, Informative)

andrewman327 (635952) | more than 8 years ago | (#15902169)

The linked article talks about a small scale experiement in bidding on print ads. Considering the auctions ended back in February I do not know if Google plans to do it again.

Re:AdSense already does this . . .? (1)

James_Aguilar (890772) | more than 8 years ago | (#15902235)

Yes, I got the wrong article, but I believe that adsense does still do this. If you search Google for /adwords auction/, you will find many references to the Adwords auction system. Thanks for pointing out my error, but my question stands.

Re:AdSense already does this . . .? (0)

Anonymous Coward | more than 8 years ago | (#15902245)

Google already indexes the web. So do other sites. Then there are meta-searchengines.
Adsense already auctions ad space to advertisers. So do other sites. Now there is a meta ad-broker.
Regarding the potential for success: How many users search with Google or another search engine? How many users search with a meta-searchengine? Nuff said...

Web Revenue Stream (3, Insightful)

Petskull (650178) | more than 8 years ago | (#15902287)

Though this idea strikes me as fleeting, it brings up the good ancient question of paying for the web.

So far, the web has been treated as commercial space by PR depts; somewhere between TV and print media. Sort of a place to hold eyeballs while advertisments get sprayed onto them. To me, it seems to be failing. For some reason, we can't seem to match worth with dollar value. Yet webtech (servers, hosting, design) still generate a significant cost.

I think that once we figure out how to pay for cyberspace other than as a hobby expense, the business model will have profound implications on web ads, filesharing, and IP.

Re:Web Revenue Stream (0)

Anonymous Coward | more than 8 years ago | (#15902365)

You seem to be living in 2001.

Web advertising is a multi billion dollar industry. It's a different industry to TV, print, etc. advertising, and attracts different advertisers. But that's because it uses an entirely different model. Probably the most important difference (which is something that really came into prominence after the dot com bust) is CPA (Cost per Aquisition). I.e Advertisers don't have to pay for anything until the get a lead or a sale. Publishers, on the other hand, get paid just for showing the ads. This more than pays for all the costs of running a website, and in fact has made some people very rich (MySpace anyone?)

Re:Web Revenue Stream = Overblown (2, Interesting)

DECS (891519) | more than 8 years ago | (#15904312)

There is actaully little money in contextual ads or "Content Match." The unrealistic dotcom business models that involved selling content using ads are repeating, but that doesn't mean they will work this time around. Consider your own example: MySpace.

MySpace had to get bailed out by Google; they *weren't* making money on their non-stop heavy handed ad-extravaganza. Have you ever visted MySpace? It has more ads going than than an "Advertising suppliment" and there are interstitials and popups and every other trick in the book. It's the highest trafficed site on the web: and they're still in business trouble!

If the #1 top traffic site in the world + shamless quantities of advertising = money losing failure, where do you get the idea that AdSense and other programs are making webmasters rich?

Google jumped in to float MySpace because it represents a marketplace they can use to experiment with gaudy ads and even video. They couldn't let it go strategically either. However, don't think that these sites are making money on all those ads, particularly after the bandwidth spent hosting all that fat content. Have you noticed how the Wall Street Journal and other real sites are linked to subscriptions? That's because advertising doesn't pay the rent!

All the ventures that expected to sell things via advertising went under in the dotcom years - I was here watching. Nothing has changed just because people have forgot about the lessons they were suposed to have learned.

I have dealt with AdSense, AdBrite, and Yahoo! and not only do they pay pretty much nothing for views or clicks, but the traffic they report (even just for impressions, which they don't have to pay for) was around 1/8 the figure of my own stats, pretty much across the board.

I had stats running in three ways: my own web logs, external counting via cookie based Urchin stats (Google Analytics), and the impression numbers related by affiliates. All of these together were consistant. Yet after 100,000 page views, and multiplied by the number of times Yahoo! was putting an ad on my page (3 or 4, depending on their whim), they would consistantly report not ~350,000 views, but rather ~ 45,000.

If they filter out 85% of my traffic, how many clicks did they absorb? In talking to other web hosts with significant traffic, I saw a pretty clear pattern of fraud out of all the pay-per-click advertisers.

I wrote up details in Secrets of Pay Per Click Advertising [roughlydrafted.com] .

The real money in online advertising is not related to banner ads or the contextual ads, but rather Paid Placement Search: paying the search engines to show an ad for a product right when users are searching for it. There is big money in this because it actually results in a lot of sales; banner ads are purposefully overlooked by readers who have grown numb to them.

In any event, no amount of clever business models is going to sell blog advertising that earns any significant money. Unfortunately, the real money in web advertising for individuals (apart from paid placement search) is in creating thousands of fake domains that try to catch searchers typing things in directly, then show them Google/Yahoo ads for what they were looking for; this works, and makes the slumlord domain parkers money.

That's why there are so many worthless "fake search" sites, and why even Google searches now return plenty of these fake search or fake content sites, because Google, et all, are creating a model where catching buyers is more valuable than presenting real information.

Since providing access to information (and sneaking ads into the mix) is Google's core compentency and their singular business model, how long can Google crap where it eats? Can they expect users to keep using them for search results if the results they offer are worthless pages full of their own ads?

Google originally unlocked the web and made it accessable. Now they are killing it by sponsoring spam pages to funnel traffic to advertisers.

Beyond that, advertisers are suing Google for click fraud, and site owners are complaining that Google pinches them off without any explanation or proof and keeps their ad revenue. With no accountablility on either side, the ad networks are pissing off everybody who is desperately trying to get a slice of the very overblown pie of Internet advertising.

Re:Web Revenue Stream = Overblown (1)

rtb61 (674572) | more than 8 years ago | (#15908770)

When you buy a business for $500 million the first thing that goes on the bottom line is that debt and repaying it. That is how once profitable business get unprofitable overnight, they become saddled with an overloaded debt as a result of the buyout.

Search placement, is 'asta la vista' or is that 'alta vista', they lost because they were practising search placement producing crappy results whilst google was not and google beat them out for what really counted searches, msn search is where it is because they followed the same search placement model.

The reality is people use the net everyday and generally search everyday but they definitely do not buy a new car, computer, game, dvd, holiday etc. every day. By far the majority of advertising views do no occur in immediate sales but just follow the same model as TV or radio sales, when the customer finally buys a product he might remember your product.

The big catch with internet marketing is, when a customer considers your product they can immediately reference information about it, the qualities, the cost competitiveness, your sales and service record etc. in affect immediately undoing the typical marketing hype that companies pay to put out there.

There's a shopping chain that said online selling does not work, they were advertising that they were the cheapest , yet when you compared their prices the were consistently the most expensive(and no matter how much they spent it still failed), they were to used to the old model, of get them in the store with marketing where they can't compare prices.

Marketing on the internet basically exposes you to a far more competitive environment, when you fail, people might have looked but they compared and bought else where, remember, the reality behind your marketing fantasy is often just one click away.

Hope it works (3, Insightful)

andrewman327 (635952) | more than 8 years ago | (#15902153)

I fail to see the comparison between Linux and this technology. Linux is an OS and this is a market driven revenue model. That said, I think that this technique has a lot of promise. My concern is that it will take too much attention from larger advertisers to bid on different ad spots. Some people maintain thousands of ads. Market driven technology has proven itself effective in many different situations and applications and I sincerely hope that this will give AdSense a run for its money. Regardless of what AdSense does that is similar, this will at least present some competition.

Re:Hope it works (1)

Derkec (463377) | more than 8 years ago | (#15902453)

That's because this is nothing like Linux's woes. It was just thrown in there as a stupid pander.

Re:Hope it works (0)

Anonymous Coward | more than 8 years ago | (#15903349)

Kill the fuc*ing adSense.

Similar to Linux vs Windows? (4, Insightful)

sshore (50665) | more than 8 years ago | (#15902161)

In a lot of ways, this has similarities to the challenges that Linux faces in a Windows world.

I don't see it. How is selling advertising space similar to the challenges of Linux in a Windows world?

Seems like that was just thrown in as a hook.

Re:Similar to Linux vs Windows? (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15902170)

Please ignore my posting as an AC. Please don't give in to a knee-jerk reaction that this proposision is borne of naievite' or ignorance. Just give it a fair consideration.

This particular /. story is but one of many in the continuating iteration of the erosion of the principles that we as a people both hold dear and see as a bulwark and/or foundation of our country's core values and identity.

Given our collective/shared outrage, why has no one provided a web site that is a central repository of similar issues where we could visit and through the magic of the internet (tubes) be provided a unified method of response. While there are individual, different political venues/web sites devoted to specicic causes, they're generally myopic to their own specific cause and often difficult to use.

With no more ID problem than Yahoo, Excite or Gmail presents, current socio-political issues could be posted (to a centralized site) with a "Yay or Nay" button choice that when clicked would deliver ones opinion to their local political representitives and/or other principals in any given story.

We read these stories here and vent our spleen.

Alone in the glow of our displays.

Who really cares. (And why should they?)

    How does it (really) effect change. (Without which our complaints are merely self-agrandizing whining.)

Imagine if we could also in the course of a mouse click or two actually deliver our opinion to a relevant nexus.

It ain't hard, it would work. It just hasn't been done.

Later...
-------------

P.S. Given the recent description of the internet as a series of tubes, the ol' figure of speech "Going down the "Tubes" has a whole new meaning now!?!?

Re:Similar to Linux vs Windows? (0, Offtopic)

chawly (750383) | more than 8 years ago | (#15902243)

I swear that I've given fair consideration - honestly. It says nothing to me. I'm left with the knee-jerk reaction, to wit:- "JESUS H. CHRIST". But I'll think about it, I really will. But Gawd, "a relevant nexus" with "a mouse click or two" or even with a boot in the behind (or two).... I dunno, I really and honestly think you've come up with an original (and very dangerous) thought.

Re:Similar to Linux vs Windows? (1)

fotbr (855184) | more than 8 years ago | (#15902297)

You're right, it has nothing to do with the "challenges" linux has, it is entirely a hook, a desperate attempt to bring attention to an otherwise pretty lame article, nothing more.

Misnomer (3, Informative)

The Dodger (10689) | more than 8 years ago | (#15902172)

Their definition of "auction" seems somewhat different from mine. It seems to me like this is simply a system that will tell you which of your ad networks will pay you the most for displaying their ad to a given user. Not quite a true auction where the ad networks can bid for the ad space on the page being displayed to that user.


D.

Re:Misnomer (0)

Anonymous Coward | more than 8 years ago | (#15902343)

It's more like a silent auction - advertisers place CPM, CPC, or CPA bids before that impression gets served, and then the best bidder gets to place the ad.

Re:Misnomer (1)

c.gerritsen (960884) | more than 8 years ago | (#15905233)

Their definition of "auction" seems somewhat different from mine...a system that will tell you which of your ad networks will pay you the most for displaying their ad

So each advertiser enters an amount (bid) they are willing to pay for a site to impress their ad (product). When an ad impression opportunity comes in, a subset of all the bids in the system match the site's rating/info/conversion rate/etc. The highest matching bid wins the ad impression.

Just because the bids exist before the seller says that the site is ready to serve the ad doesn't mean it isn't an auction.

There won't be bidding wars per impression, but then a single ad impression is not worth enough to try to outbid the competition. However, if an advertiser isn't serving enough ads, or if the advertiser keeps buying ad space on sites with low clickthrough rates, maybe it's time to up the bid or change the matching criteria.

Huh? (2, Funny)

neonprimetime (528653) | more than 8 years ago | (#15902184)

It's quite a straightforward system, given how complicated the options are and how early it is in development.

I don't know about you, but I'm confused already. Is it straightforward? Or is it complicated? I lean towards the latter.

Competition is good. (2, Insightful)

bigattichouse (527527) | more than 8 years ago | (#15902219)

Doesn't matter if its a super-better-way-of-doing-things... If it actually causes competition with the big players (google, msn,yahoo).. then it is a good thing.

Auctions are free market in action (-1, Offtopic)

Anonymous Coward | more than 8 years ago | (#15902558)

I just wonder how long it will be before Slashdot auctions off First Post!

The competition (0)

Anonymous Coward | more than 8 years ago | (#15902266)

Advertising.com is definitely moving to this sort of model, and is actually very close to rolling it out.

Anonymous Advertising.com Employee

i hate ads (0)

Anonymous Coward | more than 8 years ago | (#15902295)

seriously, we can actually live without them (ads)... think about it. If I want to participate in an auction I am not going to do it at random because I see an ad. I will go to ebay, or some other site by decision. I hate being forcefeed information from advertisers. I hate commercials too but I guess thats another story. This sounds like a ridiculous idea to me.

Re:i hate ads (0)

Anonymous Coward | more than 8 years ago | (#15903398)

I think you grossly misunderstand what this article is about.

Re:i hate ads (0)

Anonymous Coward | more than 8 years ago | (#15903575)

Actually, I did not "Grossly" misunderstand anything you arrogant pr*ck. This is an article about a new technology for web advertising. I happen to dislike advertising as I see it as spam and I wanted to express my frustrations. If you have nothing better to do then comment on "my" misunderstandings... you might want to consider getting a life.

Re:i hate ads (1)

ouchthathurt (994052) | more than 8 years ago | (#15906865)

I do believe the poor diddums got a boo-boo.

Re:i hate ads (1)

evansvillelinux (621123) | more than 8 years ago | (#15911021)

seriously, we can actually live without them (ads)... think about it. If I want to participate in an auction I am not going to do it at random because I see an ad. I will go to ebay, or some other site by decision. I hate being forcefeed information from advertisers. I hate commercials too but I guess thats another story. This sounds like a ridiculous idea to me.

You may hate ads but much like commercials, web ads are here to stay. Many websites simply cannot stay alive without generating some sort of revenue. I guarantee that if I had to pay a fee to use most websites (including good ol' Slashdot) then I wouldn't use them. Granted, I dislike pop-up ads, but I don't mind a banner ad/text ad embedded into a web page. (My $0.02 - YMMV - void where prohibited.)

Compete (2, Interesting)

MrSquirrel (976630) | more than 8 years ago | (#15902353)

If ad companies really want to win my almighty dollar, they will compete with each other in a gladiator-style death match. May the best marketer win!

Submitted by Right Media Employee (3, Insightful)

TomHandy (578620) | more than 8 years ago | (#15902362)

Shouldn't there have been some mention that this story was submitted by bokelley@rightmedia.com? It makes some of their digs at the competition, as well as the attempt to frame RMX Direct as the "Linux" in this "fight", seem like apretty shameless attempt at free advertising and shameless pandering to the Slashdot crowd.

Re:Submitted by Right Media Employee (0)

Anonymous Coward | more than 8 years ago | (#15902602)

What do you expect? He is in the ad biz...

Re:Submitted by Right Media Employee (0)

Anonymous Coward | more than 8 years ago | (#15903780)

And you think the slashdot editors are not getting their cut?

orrrrr (1)

MarsDude (74832) | more than 8 years ago | (#15902386)

"will we see AdSense disclose more about its payouts to publishers? Will other networks like Advertising.com and ValueClick participate, or will they continue to force publishers to make hard choices?"

Or will even more information about the visitors be required by the advertisers?

I see it the other way (1)

CAIMLAS (41445) | more than 8 years ago | (#15902400)

Correct me if I'm wrong, but isn't this more like sites competing via popularity for given ads than advertisers bidding on ads?

It seems to me that this might potentially increase the revenue brought to sites via advertisement. (It certainly wouldn't result in a decrease in the number of ads - they're already there, why take 'em off?)

The Web makes advertising an annoyance (2, Insightful)

Crouty (912387) | more than 8 years ago | (#15902430)

Ads serves two purposes: Make you aware of a product and convince/manipulate you to buy it. They try to convince you by giving you information about key features, but we all know these information must be taken with a pinch of salt. They often exagerate positive features and leave out negative ones. There are much better places to look for product information than ads, i.e. the Web.

From from a consumer's point of view there is only one desirable aspect of ads: Learning that a product for a certain purpose exists. But if somebody misses anything, would he not go and search for the information himself? Again, the information is right there in the Net.

I have no interest in any ads whatsoever. I like my product information pulled by myself, not pushed by doubleclick, mediaplex or webmasterplan.

Re:The Web makes advertising an annoyance (0)

Anonymous Coward | more than 8 years ago | (#15904058)

From from a consumer's point of view there is only one desirable aspect of ads: Learning that a product for a certain purpose exists. But if somebody misses anything, would he not go and search for the information himself? Again, the information is right there in the Net.

Sometimes you have no idea that a product exits, or that you want it.

The other day, I dicovered wireless iPod headphones.

Wireless headphones... not unusual... but they had controls on them to run an iPod. I didn't know that any company made such things. I wouldn't have thought to google for them.

Re:The Web makes advertising an annoyance (1)

Crouty (912387) | more than 8 years ago | (#15904740)

The other day, I dicovered wireless iPod headphones.

Really no offense intended but with a little common sense you could have known that such a product is very propable to exist. The technology exists and so is a demand for iPod-related gadgets. What you really did not know was that you needed it, otherwise you would have looked for it before seeing that ad.

This is rather a confirmation of my theory: The ad did not provide any information you did not have already, but manipulated you into wanting something you don't need. Oh, and what was the brand again, I need one of those, too. ;-)

Re:The Web makes advertising an annoyance (1)

c.gerritsen (960884) | more than 8 years ago | (#15905276)

I like my product information pulled by myself, not pushed by doubleclick, mediaplex or webmasterplan.

Sometimes it's hard to tell whether the information you are reading on The Web was pushed by some company and is an advertisement, or is an honest review of product information.

Take TFA, for instance.

Ok, sometimes it's not so hard to tell...

Big or small sites? (2, Interesting)

miller60 (554835) | more than 8 years ago | (#15902586)

Setting aside issues of the Right Media submission of its own service and the confusing introduction .... is this a useful product for bloggers and niche sites? I saw the TechCrunch story last night and followed the link. It isn't really an auction so much as a service that optimizes an ad stream that chooses among available ads from several networks to find the one that will pay the best. This concept isn't new ... Right Media has been using it with larger clients, and the domain monetization crowd has been doing this forever (see Moniker's Traffic Club [trafficclub.com] service).

This isn't a serious competitor to AdSense for niche publishers. Here's why: all the networks it aggregates are focused on large publishers. Most require a boatload of page views to participate, and serve low-paying run-of-network ads to their smaller publishers. The great thing about AdSense is it allows you to serve relevant, effective text ads on sites like mine that get only 10,000 visitors a month. AdSense was designed to work well for small publishers AND huge ones. That's why it's been effective.

RMX Direct is trying to create a service that can bridge that gap. My bet is that it will monetize better than dealing directly with a single big-ass ad network, but less well than AdSense.

Re:Big or small sites? (0)

Anonymous Coward | more than 8 years ago | (#15903249)

Point taken, however, one thing you did not mention is that it's not a straight apples-to-apples comparison. Google solely (at this point) operates in the search market. Right Media operates in the display ad market. Of course Google can monetize more effectively, a search represents a pair of eyeballs that are actively looking and receptive to their ads.

As an aside, Right Media is trying to create an open marketplace for advertisers and publishers. This runs counter to the way every ad network operates, including Google - which offer no insight into how the money flows through their networks.

What ads? (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15902613)

I am an asshole. I use adblock! LOL! :D

If this takes off... (2, Funny)

Bieeanda (961632) | more than 8 years ago | (#15902884)

Then I can see a definite jump in the number of people using proxies.

"Fifty percent of our hits are coming from Antarctica? Shit, quick, what do penguins buy?!"

Doesn't matter (1)

NineNine (235196) | more than 8 years ago | (#15903340)

It doesn't matter to me. Online mainstream (non-porn) advertising is still in the Dark Ages with this whole per-click thing. I won't spend a dime on advertising my e-commerce site until advertisers like Google Adwords get their collective heads out of their asses and get rid of this stupid per-click model. It doesn't work. It's a waste of money. The porn industry dumped per-click completely back in (the only ones who do per-click are largely scams now, and the experienced webmasters know this).

Oh please (1)

/dev/trash (182850) | more than 8 years ago | (#15903344)

Just stop with the Linux v. Windows shilling.

It doesn't make you cool.

iRMX Real Time OS (1)

plisskin (979687) | more than 8 years ago | (#15903462)

I thought my company was the only one still using the iRMX Real Time OS [tenasys.com] and PLM/386!! Oh wait...

Bidvertiser (1)

arhhook (995275) | more than 8 years ago | (#15904305)

Bidvertiser has been doing this for a while now, along with Google AdSence. This is news?

Interesting concept (1)

Serveert (102805) | more than 8 years ago | (#15904891)

Currently valueclick, casale (I believe) and others allow for publishers to specify a minimum CPM. When that is not met they "default" to another ad network. That is how this has been done forever. Now they want to offer the service to mine the web for the highest CPM.

In a perfect world, this would work well, reality is that all the players out there have legacy code that cannot integrate with this. Many don't know the CPM until at the end of the month. Google adsense will never provide this information, period. Also, it's hard to say what the CPM will be in real time. If I see your IP is in the UK and I give you a UK-specific ad, it may be a $2 CPM ad, or a $1 CPM ad, depending on frequency caps and about 10 million different factors. Time of day. Budget.

I think the best solution is to just choose someone who gives you good effective CPM, then, if you can, set a minimum CPM before you default to another player. I like new ideas, this is a good one. It's very idealistic, perhaps too much so at this point. Hopefully everything can be worked out so publishers can benefit.

So, how much... (1)

Rix (54095) | more than 8 years ago | (#15907908)

Are the ads my browser drops on the floor worth?

Nice slashvertisement... (1)

M1000 (21853) | more than 8 years ago | (#15908068)

Nice slashvertisement from bokelley@rightmedia.com . !
And nice useless linux plug that fooled our mighty *editor* !!!

Hope you get many advertisements in your inbox, bokelley@rightmedia.com .
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