Online display ad specialist Right Media was put on the map when Yahoo purchased a 20 percent stake valued at $45 million. Now, after experiencing revenue growth of 81 percent in the past six months, NY-based Right Media harbors ambitions of soon challenging its patron and other web giants like Google. But despite rapid success, Michael Walrath, 31, still finds it difficult to be taken seriously when he says he wants to reinvent the way display ads are bought and sold by using an “open auction platform,” he tellsBusinessWeek: “We hear people say, ‘What you’re doing, this is reinventing-an-industry-type stuff. You guys are too young to do this.'”
Walrath’s reinvention pitch goes like this: Online media companies, publishers, and advertisers aren’t getting the best value from deals because they typically negotiate in a closed system without much information about what others are willing to pay and why. For instance, lack of information regarding MySpace users’ pages may cause some advertisers to shy away from placing ads on the site. This is where Right Media’s open auction system comes in: marketers can learn more about the available space and, through participating ad-targeting companies, the web surfers who may be viewing their ads. Once that information is absorbed, they can decide whether to bid for that space. At least in theory, the greater transparency widens the pool of would-be buyers, often resulting in higher prices for the sellers and a more successfully targeted ad for the marketer.
CIBC reports that ad networks and exchanges – such as Right Media – generated $4.3 billion in U.S. sales in 2006 and it expects the industry to grow an average of 15 percent a year for the next four years so it would seem that Right Media’s aspirations are not mere pipe dreams. But Right Media has company: eBay, which is experimenting with its advertising auction vehicle, eBay Media Marketplace, as well as Google, to name two majors pursuing ad auction service.
To effectivelyt compete, a smaller company like Right Media will need to move even more quickly in attracting big name ad sellers — and additional investment.
Related:
— Ebay Looks To Social Nets For Growth: Report
— <a href="MySpace
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