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Advertising - Thursday, April 26, 2007

AdTech: Wunderloop's Ad Exchange

We got to spend some time at a brew pub outside AdTech with Wunderloop founder Ulrich Hegge. Last year Hegge explains that he could walk through AdTech and few people would recognize the company name on his badge. This year, that has all changed. In fact DoubleClick CEO David Rosenblatt stopped Hegge to chat up his new competitor.

Germany-based Wunderloop has gained attention thanks in part to recent funding from Niklas Zennström, Howard Hartenbaum, Klaus Hommels and others. The company which was built on its behavioral ad search engine has also beta released an ad exchange that competes with Right Media and the to-be-launched ad exchange from DoubleClick.

Even before meeting with Hegge, we were convinced that ad exchanges are going to change the online ad landscape more than any other development. Running the a:c network, we realize how absurdly inefficient is the online ad marketplace. It amazes us that the ad marketplace concept has not already taken hold.

Hegge gave us some impressive numbers on the publisher uptake of his ad exchange but warned that it is still in beta and has a long way to go to get to critical mass. We wouldn't be surprised to see Wunderloop's ad exchange have greater initial success in Europe than Right Media has had in the US. The reason is that there are far fewer choices for publishers and advertisers in Europe. There are fewer ad networks in Europe perhaps because with all its languages and local norms it is harder to scale. So there is a greater need for a hub to pull advertisers and publishers together.

As it happens, our sister site the a:c euro met with investor Klaus Hommels last week in Zurich. He's bullish on Wunderloop and says he got a good deal on the valuation for the shares he and his colleagues acquired. He confirmed what Ulrich told us - that Wunderloop had gone through at two or three close calls after burning through early investors' cash. But now he thinks it's going to be acquired by eBay or another large company.

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