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Exchange Lab Online Ad Exchange Opens in Toronto

October 19, 2011

Online ad exchange firm The Exchange Lab has established a Toronto office that will serve as the hub for its North American operations. The company also plans to open a New York office in the first quarter of 2012.

The Toronto office of The Exchange Lab will be led by James Aitken, a Toronto native who has spent the past 10 years with the company in its home base of London, England. Aitken operates the investment/venture capital division of the Digital Tribe L.P. Group of Companies, which specializes in investing in start-up digital media businesses (investments include The Exchange Lab, The Trade Desk, Appsavvy and Adconion).

Aitken will be joined by Thierry Bazay, the former strategic account executive on Microsoft’s advertising solution specialist team. The office is launching with four staff members, although Aitken said there are plans to add “quite a few more” in the form of account management, bidders and technical staff. Aitken said that introduction of the exchange model–in which online inventory is sold to the highest bidder in real-time–will help the Canadian online ad market grow significantly. Online currently represents about 17% of the total Canadian media spend, he said, compared with 30% in markets such as the United Kingdom and the U.S.

“The major problem is that agencies haven’t actually started properly demonstrating the value of digital media and how it can be effective for advertisers,” said Aitken.

Exchanges, he said, can “squeeze a lot of value” out of the online medium. Canada also represents a significant growth opportunity for The Exchange Lab since, he said, there is so little activity in the area of real-time online bidding. According to Aitken, as much as 35%-40% of the online impressions sold in the U.S. and the U.K. are purchased through real-time bidding, compared with between 2.5% and 5% in Canada. He predicted that the sector will grow “quite dramatically” in the next 12 to 24 months. “Exchanges are a pretty simple proposition,” he said. “You have the opportunity to buy really inexpensive online display inventory (prices can be up to 10 times cheaper than standard inventory, he said) that, through our technology, can be extremely targeted.”