FAQ

The Mission

What is AdECN?

AdECN is an exchange for online display advertising.  We took the ECN model from the stock market — a real-time, automated, auction-based exchange like Island or Archipelago — and applied it to our industry.   It is an electronic market for buyers and sellers of display ads on the internet.

And like a stock exchange, not just anyone can trade directly on the exchange.  On the stock exchange, individual buyers and sellers have to trade through a stock broker.  In our exchange, advertisers and publishers have to trade through an ad network. 

The purpose of the exchange — any exchange — is to provide liquidity and visibility for its members.  In our case liquidity means the ad network members can sell more of their publishers' inventory and at higher prices, and spend more of their advertisers' campaigns and at higher ROIs.  They also can make sure the wrong ads don't appear on the wrong sites.

In other words, the ad networks in the AdECN exchange make money while keeping their customers happy.

What's wrong with the way the industry works today?

It is incredibly inefficient.  Imagine a world full of stock brokers but without a stock exchange.  If you went in to buy 1000 shares of IBM from your broker, he would have to have another client willing to sell you 1000 shares of IBM — or he would have to call around to his other broker friends to see if they had a seller of IBM shares. 

The same thing happens in our world.  Ad networks are always trying to find more and better inventory for their advertisers' campaigns, and sell more of their publishers' inventory for higher prices.  When they have to call each other up and pass deals along, each takes his commission.  It is not at all uncommon for an advertiser to pay something like $1.00 CPM and get $0.18 inventory. The rest was eaten up in commissions to middlemen.

And everyone except the middlemen loses.  The advertiser overpays, the publisher is underpaid, and the networks with the direct client relationships could have made more in commissions, markup, and arbitrage profits.  This chain buying provides liquidity, but it is very, very expensive liquidity.

Also, when there are links in a chain like this, the advertiser tends to lose control over where his ad is shown, and publishers lose control over which ads appear on their sites.  You get things like dating ads showing up on Disney sites.