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One of the things that boggles my mind is how massively fragmented and confusing the display world still is. It’s been over three years since the first ad-exchange launched yet the world hasn’t significantly changed. What makes matters more confusing is that there is no consistent terminology to describe what a company does. It seems everybody describes themselves as either a platform, marketplace or exchange — so what’s the difference?

A company can call itself a publisher, an agency, a network, a broker, a marketplace, an exchange, an optimizer — what does it all mean? What’s the difference between Right Media and Contextweb? Admeld and Rubicon? That’s really the problem — today’s commonly used labels are useless.

Instead of evaluating a company based on labels, evaluate it based on the services it provides, technology it has, the partners it works with, the revenue model and the media revenue it facilitates. Note — below I focus entirely on companies that in some shape or form touch an *impression* — either as a technology provider, buyer or seller. There are peripheral companies that provide a whole world of supporting services, but I’m leaving those out for now to avoid confusion.


Each company provides certain core services to partners, customers and vendors. These primarily center around the relationship the company has with the media that flows through it.

Service Description Example Implication
Selling of Owned & Operated Media The company represents and sells media inventory that it owns. Yahoo selling inventory on Yahoo Mail.
New York Times selling it’s inventory
Company’s sole objective is to maximize CPMs and revenue.
Arbitrage of Off-Network Media The company resells media inventory that it acquires from other services. Yahoo selling users on the newspaper consortium.
Rubicon selling inventory from it’s network of publishers.
Company takes arbitrage of the inventory which means that it’s incentivized to buy low and sell high to maximize it’s own revenue rather than that of the inventory owner or the advertiser.
Inventory or Advertiser Representation Services The company helps inventory owners sell inventory at a fixed margin. AdMeld serving as a direct rep for publishers remant
X+1 managing all campaigns for a specific advertiser or agency
Company is incentivized to maximize revenue for the inventory owner or ROI for the advertiser.
Data Aggregation Company aggregates user data and resells it BlueKai’s data exchange
Exelate’s data marketplace
Company hates Safari and IE8


There are certain core technologies that define what a company does. Note that you will find technologies such as dynamic creative optimization, behavioral classification and contextualization missing from the below list as they are differentiators — they don’t define what a company does but provide a competitive advantage over the competition.

Technology Description Example Implication
Internally available adserver Company has a proprietary in-house adserving system. Specific Media has it’s own proprietary adserving technology that it uses to manage it’s network.

Company sees technology as a competitive asset against competitors.
Externally available adserver An adserver that the company licenses (either free or paid) to third party companies to manage their own online media. OpenX providing their hosted adserver to publishers
Invite Media’s cross-exchange Bid Manager platform
Google’s Ad Manager
Multiple companies using the same platform provides both aggregation and consolidation opportunities. Technology in this case helps build an open platform (since everyone has access).
Internal Trading Inventory run through the externally available adserver can be bought and sold internally Google’s AdEx allows multiple participants to use the externally available adserver to buy and sell media.
Right Media’s NMX customers can buy and sell media to each-other directly.
There is a network effect related to the size of the platform. The more participants the more value there is for everybody involved.
Buying APIs Company provides an API, either real-time or non, through which buyers can upload creatives and manage campaigns. Right Media allows it’s customers to traffic line items and creatives using it’s APIs. Company is empowering buyers to be smarter by enabling deeper integration across platforms. The stronger the APIs, the more the buyers can spend.
Selling API Company provides a real-time API through which sellers can ask in real-time how much company is willing to pay for an impression. Right Media and respond in real-time to a ‘get-price’ request from Fox Interactive Media’s auction technology Company can value inventory in real-time.

Size Matters

Last but not least, the size and the partnerships of a company matters. I’ve written before about the perils of building technology in a void. You can have the most amazing platform that provides great services, but if you’re only running a few thousand dollars a month it’s all moot in the grand scheme of things.

Size can be measured either in impressions or revenue, the latter being far more telling. Getting a billion impressions of traffic a day isn’t hard these days — between Facebook and Myspace alone you probably have close to fifteen billion impressions of traffic running daily.

There’s a huge difference between a partnership and a media relationship. If you’re willing to foot the minimum monthly bill, anybody can buy Yahoo’s inventory through the Right Media platform. That doesn’t say much about who you are as a company. A partnership is different — it might be deep API integrations tying two platforms together or co-selling and marketing a joint solution.

What does it all mean?

Phew… that was a long list, so what does it all mean? Well, the above provides a slightly less fuzzy framework than the classical “ad-network”, “marketplace” or “exchange” commonly used labels to describe a company. Let’s look at a few examples:

Rubicon Project provides publisher representation services through it’s network optimization platform, arbitrages inventory through it’s internal sales team has both an internal and has an externally available adserver (one for the sales team and one for publishers) and is rumored to be working on real time buying APIs. That’s a hell of a lot more descriptive than “publisher aggregator” or “network optimizer”. The one thing I always find confusing about rubicon is that it their incentives seem to be fundamentally misaligned. How can you both arbitrage inventory and serve as a publisher representative? Updated (5/3/09 @ 8pm EST) — I seem to be misinformed. Per comments, Rubicon does not sell inventory directly to agencies.

Compare this to AdMeld which provides publisher representation services through it’s network optimization platform — an externally available adserver — and provides buying APIs (currently via passback). So what’s the difference with Rubicon? Well, one has an internal ad-network and the other doesn’t — different incentives. Publishers are starting to treat Rubicon as another ad-network in the daisy chain whereas AdMeld sells all remnant inventory as a trusted partner.

ContextWeb has an internal adserver (with a self-service interface… I don’t count that as external), they arbitrage inventory, and provide buying APIs. Compare this to Right Media which has an externally available adserver, buying and selling APIs, internal trading, data aggregation and arbitrages media (through BlueLithium/Yahoo Network). Both are “exchanges”, but clearly there is a pretty big difference between the two!

Of course if you get to Google your mind starts to explode just a little bit — as they do everything. Seriously. They buy & sell, have multiple adservers, provide buying APIs, internal trading, data aggregation…

Final Thoughts

I hope this post has given you some ways to start thinking about companies in the online ad space. I’d love to hear your feedback in the comments — what core services & technologies am I missing?

Now — next time someone says — “I’m an exchange”, why not ask — “Ok, that’s great, but what do you really do.”

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  • Josh Wexler

    Mike, as someone with deep industry knowledge, I read your post today with great interest. Unfortunately, as it relates to the Rubicon Project, you have completely mis-characterized what we do. The Rubicon Project created the ad network optimization space in 2007 and today optimizes over 1 billion ad impressions per day on behalf of premium publishers across over 400 hundred ad networks. We have consistently made publishers more money, while they do less work, while we protect their brands.

    The Rubicon Project does not arbitrage publisher inventory, and we are 100% transparent to publishers who use us. Our interests are 100% aligned with publishers to insure the highest paying ad network is served for each impression we optimize. Publishers do not view us as another ad network in the daisy chain, as we manage all of our publishers non-guaranteed inventory. I’m not sure where you received your information about what we do, but it is inaccurate. I am more than happy to go into greater detail regarding specifics at your convenience.

  • Mike


    I do apologize — I was under the understanding that you guys have hired an in-house sales-team that is selling direct to agencies. Is this incorrect? If so let me know and I’ll update the post! If it is correct — what is the revenue model for Rubicon in this case?


  • Josh Wexler

    Thanks for the quick response, Mike.

    That is not correct. The Rubicon Project has never sold direct to agencies or advertisers, nor do we have any intention to do so. We have an ad network team that sells to ad networks. Our revenue model has always been a service fee based on total publisher revenue managed on our platform.

  • Rob Leathern

    Great post. This space is both dynamic and strangely slow-moving simultaneously, isn’t it?

    At CPM Advisors ( we’ve been building technology, as well as operating within the ad network and exchange environment as a seller and buyer of media. No we’re not actually a consulting company! We’ve been building a technology and service offering that helps mid-sized advertisers buy display media more efficiently and profitably. My goal is to become as efficient as possible internally in doing what we do, and in so doing make display advertising work for people who have not been able to make it work so far, or haven’t tried because of its reputation for burning the uninitiated. (follow us on twitter

    One of the reasons it gets confusing on the companies and nomenclature is because unfortunately there it isn’t yet possible for there to be profitable, sustainable, neatly-packaged companies that sit on one side or the other of the service/technology fence in this industry. Part of that is because of the lack of robust infrastructure technology underpinning ad networks, ad servers, publishers, and the optimization schema around all of the above. Google has become a de facto central marketplace for search (sorry Yahoo, Microsoft, Ask) but forget about it for display so far.

    It’s a pretty hard problem. The volumes and diversity of inventory is much bigger in terms of pages, websites and the like, and inventory placement diversity persists meaning the computational and bandwidth requirements are tremendous to creating any kind of proper centralization thereof (witness existing ad exchange scaling problems :-) . Also the other thing we’ve all learned is there is a lot of ad inventory that’s not really worth centralizing.

    We can (and should) discuss why this business is or is not like the financial markets, but the ad space’s still-not-created not-yet-robust underlying infrastructure will hopefully be the back upon which thousands of big businesses in this field will be built. We look forward to working with others to be a part of that world.

  • Matt

    Great article. I do have questions about how Rubicon works though. It was my understanding that Rubicon pools multiple publishers inventory and resells the inventory to Ad Networks and direct marketers. Since the Ad Buyers have the relationship (and contract) with Rubicon and not the publisher this seems like some form of arbitrage. Is this correct?

    Thanks for your help,

  • Tom

    Great overall article. Odd comments, as Rubicon did NOT “create” the ad network optimization model…although they are the largest. Pubmatic, Yieldbuild, all in the game as well. In fact the optimization piece was created by some networks themselves prior to entire companies built upon this service. In my opinion the bark here is much bigger than the bite.

    Anyways, this is a great resource and appreciate the information.

  • Mike


    You’re absolutely right. Right Media had the network optimization piece back in a product called “DDR” back in 2005/2006! It’s certainly not a new idea.


  • Luke

    I agree, great article Mike.

    As the industry becomes more fragmented, the government applies laser focus to the issue of data privacy and use. This is the trend to watch over the next several years.

    Regarding DDR – You’re right that circa 1995 the Right Media product was called DDR (Direct Direct Response..or something?) before the name evolved into Direct Media Exchange (

  • http://http// Zach Coelius

    I think you missed out on the discussion of the buy side of the equation. Media by itself is only worth so much to an advertiser. There are technology companies emerging on the buy side that manage the targeting, optimization, data, and buying of media to achieve the results that the advertisers are ultimately looking for. This is the role that media buying agencies have traditionally filled but using sophisticated technology instead of a 24 year old with a spreadsheet and a fax machine.

    Keep up the great work, love the blog

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  • Lianghwa Jou

    I am curious about why data aggregator (BlueKai and eXelator) hate IE8 and Safari. There must be a story somewhere.

  • Mike

    Hi Lianghwa,

    Safari straight up bans 3rd party cookies –> That means no user tracking there whatsoever. IE8 has the ‘safe browsing mode’ –> basically the same problem.

    No cookies makes running a behavioral exchange difficult!


  • Lianghwa Jou

    I just finished reading your ‘the-plight-of-the-ad-technology-startup’ post. It seems to indicate that BlueKai and eXelate will have tough time to make money since they are outside the value chain. Like to hear what you think they can do in the online ad ecosystem.

  • John

    I hear that Rubicon is starting to partner with sales rep firms to sell their publisher’s inventory to agencies…so though they might not have a direct internal sales team they are revenue sharing with sales rep firms on inventory that they are suppose to be managing and optimizing. Can anyone confirm that? And if that is the case (99.9% sure it is, which is really 100% positive), does anyone else see it as competing with publisher’s direct sales teams? Thanks for your thoughts.

  • Jordan Mitchell

    So Mike, in the spirit of this post and the transparency you request, what does AppNexus really do?! Why do I hear about it frequently in the online ad space, yet your web site messaging places you in the cloud computing space? :-)

  • Alex

    Hi Mike,

    you left the entire CPA/ Affiliate perspective out of your description. Why is that?

    Thanks, Bye

  • Sharon Wilson

    Thank you for your very informative post! I agree that “Instead of evaluating a company based on labels, evaluate it based on the services it provides, technology it has, the partners it works with, the revenue model and the media revenue it facilitates”. Business owners should think of small business advertising ideas, either a new service or product, that people are seeking out and that will make the business stand out from the crowd.

  • Tim

    Good article. There is no doubt that tech is the key to this marketplace so it is no wonder than some of these guys try to pitch themselves into all areas. In our experience, trying to figure out what they can actually do, from what they say they can do, is quite difficult.

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