
High-Speed Ad Traders Profit by Arbitraging Your Eyeballs - forrest_t
http://www.bloomberg.com/news/2014-11-07/high-speed-ad-traders-profit-by-arbitraging-your-eyeballs.html
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toth
I got the impression that writer of the article thinks that this arbitraging
is supposed to be hurting someone, but it's not clear who.

If the traders are arbitrating prices between different ad exchanges, their
net price will be zero and they make the ad market more efficient. Who exactly
is hurt?

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kasey_junk
In aggregate? No one. But the people who had been buying ads on the "cheaper"
exchanges exclusively either through luck or because they had done research to
determine they were cheaper, will now be paying a higher price. Personally,
that doesn't bother me, but when discussions about this come up with regard to
the financial markets there seems to be some folks who have a moral problem
with market participants who "only" act as price arbs between exchanges.

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toth
Yes, and they miss the fact arbitrageurs actually help most people.

If these arbitrageurs are keeping all the prices in different exchanges in
line, it means that your average ad seller/buyer does not need to spend time
and money on researching which exchange has best liquidity (although they
probably still want to know which one chargers lower comissions).

Of course, there will be an effective fee that the arbitrageurs collect, but
competition amongst them will drive that feed down (in principle, to less than
what the average person would have spent on research).

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t0mas88
After reading this I took the rest of the article with a very big grain of
salt:

"When you open a web page, information such as age, sex, location and search
history are zapped to buyers vying for your attention. Bundled with 999 other
people, those eyeballs are offered to the highest bidder, usually ad agencies
and their clients"

Since the data described is not actually "zapped to buyers" and there is
definitely no "bundled with 999 other people" involved in RTB. The whole
concept is bidding for a single impression to avoid paying for people you
don't want to target to.

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aggronn
I'm interested in knowing how people can even detect this happening. Anyone?
The article didn't really go into detail on that point.

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imaginenore
I don't get it. If you buy an ad, you are the highest bidder. How do you sell
it for more? Another exchange?

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kasey_junk
Yes. This is describing classic venue arbitrage.

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imaginenore
And how do you transfer an ad between exchanges?

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sologoub
Supposedly, you'd fire another ad tag or be integrated in some other way.

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johnrob
All transactions on ad exchanges are arbitrage, unless the real time bidder is
actually selling a product.

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programminggeek
This kind of thing used to happen in the early days of AdSense and other
platforms.

Any time you can take low value ads, and move them to higher value ads, you
can make money.

It isn't a great user experience, but people peddling ads at scale don't care
about UX a whole lot from what I've seen.

