UPDATE April 30: Yahoo: Right Media, or Social Media Junk CPM story?
Yahoo bought a 20 percent stake in Right Media last October and is now set to pay approximately $680 million, in equal parts of stock and cash, for the remaining interest in the company.
UPDATE April 4: Who needs Right Media? DoubleClick plans to announce today that it is setting up a Nasdaq-like exchange for the buying and selling of digital advertisements. The new DoubleClick advertising exchange will bring Web publishers and advertising buyers together on a Web site where they can participate in auctions for ad space.
DoubleClick views the exchange as the centerpiece of a growth plan and may derive the majority of revenue from the new service within five years, said David Rosenblatt, CEO: “We already have the largest sellers and the largest buyers. This will link them for the first time.
NOVEMBER 1, 2006: Does Right Media have the right solution for increasing yield on non-premium advertising inventory online? Yahoo CEO Terry Semel believes it does.
Yahoo recently took a 20% equity position in the nascent firm, at a cost of close to $45 million.
Calling Right Media the “largest emerging online advertising exchange for buying and selling ad inventory,” Semel said at Yhaoo’s Q3 conference call:
The market is going through a significant transition with new forms of inventory becoming available from a range of new and established competitors…in response to the changing mix of available inventory…we will also join the Right Media exchange…This relationship gives Yahoo an opportunity to lead and influence the development of this new and innovative marketplace. It makes it easier for marketers to purchase Yahoo inventory and has the potential to increase yield on non-premium inventory.
Right Media is also funded by RedPoint Ventures and has raised a total of about $55 million to date.
I spoke today with Michael Walrath, Right Media founder and CEO, to discuss his vision for Right Media.
Walrath, a DoubleClick veteran, founded Right Media in 2003 to “transform the business of online advertising.” For Walrath, there has traditionally been an uneven playing field in interactive media and he is on a mission to bring “efficiency, value and standardization” to every transaction.
How does Right Media attain such goals, while aiming to make a tidy profit?
More than two billion impressions are traded daily through the Right Media Exchange and Right Media gets a piece of each one.
According to Walrath, Right Media Exchange is the first of its kind open media exchange for the interactive advertising industry:
Right Media Exchange boasts more than 11,000 advertisers, ad networks and publishers in its network. Walrath is confident that “everyone wins”:
An open marketplace is a better place to do business. Buyers, sellers and service providers of any size connect to each other easily, access more media and trade at fair market value. Right Media's role is not to dictate how media is bought and sold, but to provide an environment where companies can make better choices, grow their business and add value to the community.
Ad Networks drive better results for their advertisers and publishers,
Advertisers control performance globally and maximize ROI,
Publishers allocate each impression to the highest bidder and maximize revenue,
Technology Providers create, market and distribute technology solutions to a broad community of users through an open platform and set of APIs.
Right Media Exchange’s platform helps optimize the buying and selling of digital media:
Top-tier publishers with billions of non-premium ad impressions have to think strategically about turning all of those undersold assets into real revenue. When publishers simply put that inventory in the hands of third-party intermediaries, they inevitably leave money on the table.
Top-tier publisher Yahoo may not want to leave money on the interactive advertising table, but it is happy to commit a lot of money to sit at Right Media’s open media exchange table.