NEW YORK Havas is readying for the launch of real-time bidding exchanges by striking a deal with tech provider DataXu.
Havas will use DataXu's new technology to manage participation in the upcoming launch of the Google's real-time bidding exchange. DataXu's system, developed by MIT engineers, allows ad buyers to set rules for placing bids on units as they appear on ad exchanges and inventory management systems.
Google is expected next week to roll out its real-time bidding exchange, which will allow advertisers to bid on impressions based on data such as audience characteristics. By breaking the ad process down on an impression-by-impression basis, the exchange provides an opportunity for better targeting at lower costs. The end goal is to move display advertising toward the efficiency of search ad systems.
Real-time bidding in theory could turn the online display ad industry on its head, at least the large chunk of it that publishers don't sell directly. Rather than publishers or audience aggregators matching ad impressions with advertisers, the advertisers would make those decisions.
"What's happening is that you as a buyer will have an opportunity to make a decision about which ad impressions are most valuable across a gigantic swathe of impressions," said Nathan Woodman, svp of corporate development at Havas Digital.
Havas has teamed with DataXu, which this spring closed a $6 million round of venture funding, to use the company's Adnetik system, a digital media-trading platform. The firm was created with the idea that, thus far, the technology for managing and improving ad campaigns has existed on the sell side rather than the buy side.
That's hindered the sophistication of display advertising, said Mike Baker (shown above), CEO of DataXu and former CEO of mobile ad network Enpocket.
"It's so woefully inefficient," he said. "These ad exchanges will eventually change how media is bought. A significant portion of the spend will be traded like commodities or stocks."
Agencies are preparing for real-time bidding at various levels. Most holding companies have groups dedicated to piecing together homegrown and outsourced technologies. WPP Group's platform is called B3; Interpublic has Cadreon; Publicis has Vivaki; and Omnicom Media Group Digital has similar capabilities.
"This is the first time we're on the cusp of the buyer being able to take out the impressions they want and reject they don't want on a massive scale," said Woodman. "It should lead to a more efficient media buy."