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Disruptive DoubleClick Advertising Exchange

DoubleClick has unveiled a dynamic online marketplace that directly connects buyers and sellers of online display advertising for maximum return and efficiency. Is this another disruptive development intended to remove advertising agencies from yet one more piece of the value chain?

To sustain the growth of their online advertising programs and increase operational efficiencies, buyers and sellers are looking for new methods to generate additional revenue -- specifically one that fixes the known problems inherent within existing methods.

Sellers find that existing channels often do not maximize overall yield, and that they are being left with significant volumes of unsold inventory. A recent study conducted by Forrester Research uncovered the fact that 25 percent of online advertising inventory is never sold.

Another 15 percent is sold off as a remnant, and even more is undersold. In addition, buyers struggle to find the most efficient way to access and selectively target the online inventory they want, at the right price. Clearly, the traditional manual labor-intensive and historically deficient approach -- typically managed by ad agencies -- is ripe for a transformation.

The new "DoubleClick Advertising Exchange" service solves these problems by providing both constituent groups with a dynamic marketplace where they can buy and sell online display advertising -- impression by impression -- with greater efficiency, transparency and control.

The DoubleClick service is currently in limited testing with a select group of buyers and sellers in the United States. The marketplace is expected to go live in the third quarter and will be available globally by the end of 2007.

Using the new platform, publishers and other sellers make specific inventory available for purchase. Sellers define a minimum bid value -- or "reserve price" -- for the inventory and specify rules to restrict certain advertisers, formats and content. In parallel, buyers specify the online inventory they wish to purchase, and the associated bid value for that inventory.

They can also specify a rule to dynamically control the bid so that the bid price is automatically adjusted in line with inventory performance. DoubleClick says that the service can be easily adapted to support new and emerging technologies such as video, in-game and other future forms of digital advertising.

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