by Laurie Sullivan @lauriesullivan, November 1, 2017

The latest sign of an auction-based open ad exchange running on programmatic technology is the one built by engineers at Crealytics. The company's CEO has begun discussions with retailers to give them more choices when it comes to serving Sponsored Ads on their sites.

The platform would give retailers a bigger pool of ads from which to choose. Rather than the retailer having to choose one supplier, the advertisements would come from many such as Google and Criteo's HookLogic, for example. Of course the suppliers would need to sign up.

Andreas Reiffen, CEO at Crealytics, likens it to the change to programmatic that occurred in display advertising, which took many years. It will now happen in this niche display business on retail sites in a fraction of time, he said.

The open marketplace running on programmatic technology would give advertisers the opportunity to reach more consumers across retail sites by choosing from a larger pool of advertising inventory.

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Eventually not only Google and HookLogic could compete for the sponsored ad unit, but also companies like Marin and Kenshoo, Reiffen said. He believes it would bring much more competition into the market and create better pricing for retailers.

Here's how it works: different networks such as Google, HookLogic, and others would submit a "product ad suggestion" and auction bid. The retailer would measure the relevancy of the advertisement by matching it against searches and product recommendations, which increases the quality of the suggestion, and factors into the bid. An advertisement with a higher relevant score and lower bid might gain a better ad unit position on the retailer's site.

Protecting consumers and advertisers from malware and ad fraud on an open marketplace requires handing the controls to the retailer, Reiffen said. The technology takes the decision on what ads to run out of the hands of a third party and into the hands of the retailer. The platform can block certain ads from serving. The retailer can control the ranking and filter out undesirable ads.

"The retailer decides on the ads to run based on the recommendation and score," Reiffen said. "This keeps the quality of ads high."