AdECN Launches New Ad Exchange Model

AdECN Inc. at the ad:tech New York conference invited advertising networks that buy and sell online advertising to join in a limited pilot of its new federated system . The federated system is an extension of AdECN’s existing exchange platform and will provide functionality not currently available in any online exchange, including the ability for ad networks to use their own proprietary technology, such as behavioral and demographic targeting, and optimization tools.

Like the New York Stock Exchange model, the AdECN exchange acts as a neutral auction house that automates the buying and selling of online display advertising. A neutral exchange is one that brings together multiple ad networks, agencies and online brokers to create a marketplace where all participants access a larger pool of supply and demand for online advertising inventory.

Unlike other exchanges, with the addition of the new federated system, the AdECN exchange will now allow its members to price every ad impression in the auction, so display ad impressions aren’t undervalued or overvalued. For instance, once an auction is initiated within the exchange, all of the members can bid equally for that ad impression and the highest bid wins. The exchange will also continue to provide a hosted technology service for other ad networks, brokers and agencies.

“Our goal is to provide a fair and level playing field for all the online advertising industry players to play on,” said Jeff Green, co-founder of AdECN. “The federated system simplifies online buying and selling. It will allow ad networks to use their own tools in which they have invested large amounts of time and money, to connect advertisers and publishers across the industry.”

AdECN has been running a test pilot of the federated system with Microsoft’s owned and operated ad network properties including the MSNDR network and Content AdsBeta, Microsoft’s contextual advertising offering. Added Green, “Since being acquired by Microsoft, we now have the fuel we need to build and test our new system, which we believe creates a bridge between all online buyers and sellers to improve efficiencies and increase the value of online advertising.”

Pilot participants will be selected from a pool of online ad networks, that express interest and meet the outlined criteria. AdECN will begin the pilot in early 2009 and intends to roll out additional robust data and targeting features next year.

All members of the AdECN exchange, including pilot participants, pay a membership fee to join the exchange and flat transaction fees based on ad inventory volume. AdECN is a neutral, real-time, auction-based exchange for buying and selling online display advertising. The company is based near Santa Barbara, Calif.

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