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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 arbi

by toth 12y ago

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?

kasey_junk 12y ago
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.
- toth 12y ago
  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).
aggronn 12y ago
Assuming this doesn't affect advertiser RTB budgets, it hurts all of the players who actually create value (publishers, exchange providers, etc)
- toth 12y ago
  How does it hurt them? They are matching buyers and sellers of ads across different exchanges, how are buyers and sellers hurt by this? Yes, the traders pocket a spread for their trouble, but they also save you the hassle of checking all the different exchanges. And if you really care about that spread, you still have the option of looking at all the different exchanges.
  - aggronn 12y ago
    X dollars go in, x dollars go out. before, average revenue per market participant category was x/n. Now its x/(n+1). At the end of the day, unless their participation increases x by more than their cut, they're just taking revenue from everyone in the game who actually provides value. They don't make the market more efficient.

by toth 12y ago

kasey_junk 12y ago

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.

toth 12y ago
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).

aggronn 12y ago

Assuming this doesn't affect advertiser RTB budgets, it hurts all of the players who actually create value (publishers, exchange providers, etc)

toth 12y ago
How does it hurt them? They are matching buyers and sellers of ads across different exchanges, how are buyers and sellers hurt by this? Yes, the traders pocket a spread for their trouble, but they also save you the hassle of checking all the different exchanges. And if you really care about that spread, you still have the option of looking at all the different exchanges.
- aggronn 12y ago
  X dollars go in, x dollars go out. before, average revenue per market participant category was x/n. Now its x/(n+1). At the end of the day, unless their participation increases x by more than their cut, they're just taking revenue from everyone in the game who actually provides value. They don't make the market more efficient.