Online publisher to introduce ad space auctions

In what is believed to be a first for the UK advertising industry a leading Internet publisher is introducing online ad space auctions for its most valuable inventory.

The company, s1, is to sell its flagship Media Playing Unit (MPU) space ñ on leading Scottish recruitment site s1jobs.com ñ via an ëeBay-styleí online auction system.

Managing Director Mark Smith said: ìWe believe that this represents a whole new approach to media sales, and will in time radically change the nature of media-buying. Itís taking the Google Adwords approach to the logical next step, accepting bids for in demand ìdisplayî inventory. The traditional rate-card model enforces a rigid structure that fails to take account of fluctuating demand for space. Our auction system turns that on its head by allowing buyers, not sellers, to set the price. It ensures that advertisers pay exactly what the market decides the space is worth, and no more.

ìThe success of s1jobs in Scotland has meant that demand for the MPU space has far outstripped the supply of available inventory. Rather than simply hitting advertisers with rate-card hikes we realised that a better solution was to allow the market to set its own price. Online technology is what makes the auction model feasible and it will become commonplace over the next few years for all types of media.

The MPU space will be sold in two-week ëlotsí, starting from March 20th, and advertisers can bid up to a year in advance. The system automatically discounts the winning bid to a price just above the next highest offer. Competing bidders are notified whenever a new bid is received.

Smith continued: ìOnline pay-per-click networks such as Overture and Google Adwords have been successful with bidding models that determine how ads are ranked and how much exposure, or clicks, each ad receives. But as far as weíre aware this is the first time that a major publisher has introduced a ëwinner takes allí system for valuable display inventory, where one advertiser will have full ownership of the space for each two week period.î

s1 is part of Newsquest Media Group and operates Scotlandís most successful classified advertising websites, including s1jobs, s1homes and s1play.