By David Shay, EVP of Marketing

It’s sort of funny that a process so clearly founded in free-market concepts would seem ‘confusing’ to an industry that so often enjoys employing market-based analogies to describe its own fundamentals. And yet, this seems to be the case in far more discussions than just Rich Cherecwich’s iMedia Connection piece of 7/24.

However strange the underlying phenomenon seems, though, Cherecwich is correct in pointing it out.

But, how ‘confusing’ should it be that an entity capable of driving true liquidity in a marketplace has the result of exposing the true pricing equilibrium in that market? In this particular instance, ad networks bring to the table thousands of quality publishers that, otherwise, do not have the opportunity to compete with their higher profile counterparts. This means that millions of ‘discount’ ad impressions hit the market each day, competing with higher priced impressions put on the market by ‘premium publishers’ that often end up performing just as well at lower costs.

Isn’t the natural result of that process that prices for inventory previously written off as ‘valueless’ to rise as its true value is discovered, while the prices that have been allowed to inflate, due to lack of competition, fall?

Nope…nothing ‘confusing’ about that.

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