Hi, and welcome to the DataXu blog. On this blog, the DataXu team and I will share our take on online advertising and its future. Big things are happening. Specifically, the advent of “real time bidding” on individual ad impressions is happening, and it is set to revolutionize online advertising for agencies and brands. That transformation will be a large part of our focus here.
I’ve been in the industry for a long time now and have seen one advancement after another, but in my view nothing before compares to what is going to happen in the months ahead and the transformative effect real-time bidding will have on the advertising industry. I expect a couple of years from now we’ll all look back and shake our heads in amazement at what passes for online advertising management today.
Who and what is DataXu you ask? We are a Boston-based company launching today with a real-time online advertising optimization platform. Our core technology was developed by my co-founders, an MIT aerospace professor and his PhD students. Its original purpose was to quickly sort through massive quantities of data (what they humbly refer to as a “complex combinatorial space”) in support of NASA’s Mars Mission planning. DataXu’s founders – from the distinct but highly data-driven worlds of aeronautics and online media – recognized a unique opportunity to apply these analytic innovations to improve upon the current inefficiencies of online media placement. In the words of John Wanamaker (who many consider the father of modern advertising), “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” We’re out to solve that problem.
As a starting point for our conversations here, I thought it would be helpful to briefly discuss what we mean by real-time bidding. As you likely know, the first generation of ad exchanges has operated for several years now and relies on the use of “static bidding,” which allows an advertiser to list a bid price and receive impressions by the thousand that meet the bid. The new generation of ad exchanges—being led by Google and Yahoo—is all about real-time bidding, which replaces the static bidding paradigm with dynamic bidding at the impression level.
This means that an ad buyer, for the first time, can automatically review and differentially value each individual opportunity to buy an ad impression in real time, while a consumer browses the web .The ability to buy advertising in this manner will result in a dramatic efficiency gain for buyers and sellers alike (that’s right, less manual media management!). With our platform, advertisers can greatly increase their ability to drive sales and other web conversion actions.
There is obviously much more for us to talk about in regard to DataXu and the industry overall, and you probably have a lot of questions about where this is all headed. Hopefully you’ll visit this blog often to ask those questions, and share in the discussion about where online advertising is going. In the meantime, please visit our web site often to hear more about what we’re up to. Stay tuned. We will dive deeper into the online advertising market and technologies in future posts.
Thanks for reading. I look forward to continuing the conversation.
Mike Baker, President & CEO