Google: Ad Networks and Exchanges Can Coexist

The conventional wisdom of late in the online ad industry has been that as ad exchanges rise, ad networks fall.

And as audience-based, data-centric ad buying increases in prominence, the old school, context-driven ad approach is becoming passé.

Yet Google has horses in both races. The company—in a blog post on Wednesday (Feb. 23)—is out to make a case that ad networks and exchanges can coexist, and even thrive. And context isn’t dead at all.

The basic argument of the post, authored by Neal Mohan, Google’s vp of product management, is that an either-or scenario “is the wrong way to look at it,” Mohan told Adweek. “It’s about what an agency or advertiser is trying to do.” Mohan likened the difference between using demand-side platforms to purchase ads in real time via an exchange to an investor managing his own stock portfolio. Meanwhile, using an ad network is like employing a stock broker.

“For buyers looking to manage the details of their ad buying and use their own technology and data, a DSP like Invite Media is often the best option,” Mohan wrote. “This is similar to an online broker who lets you log in and closely manage your investments…Some marketers have a desired campaign result (such as a target reach for a new car campaign or a number of conversions for a sporting tickets campaign). They want to outsource the details and have a customized, transparent media solution designed for their campaign. The Google Display Network most often fits this bill.”

Of course, many in the online ad world that have embraced demand side platforms and real-time buying would argue that using networks, or executing buys based on context, is wasteful and ignores the sophistication the medium offers. But Mohan argues that “is a shortsighted way of looking at it. Extremely sophisticated advertisers chose to work with the the Google Display Network.”

Still, there is no denying the momentum behind audience-based buying. Mohan cited a recent Digiday survey which found that 88 percent of digital buyers plan to use real-time buying in some form this year, up from 75 percent last year.

And since Google acquired the demand side platform Invite Media about six months ago, spending from agencies via the platform has surged by 300 percent, said Mohan, while the number of advertisers has doubled. “I’ve never seen a technology get adopted this fast,” he said.