Today, I viewed yet another digiday conference from of a small content provider, or publisher, a participant in various blogger advertising networks, an advisor to politicians considering media buys, and an old Wall Street techie. It is from this vantage point that I wish to offer a few out of the box ideas.

I will start at a very rudimentary level and start off by trying to tie together the online advertising world for the big players at this conference with the world of blogger advertising networks. For different people, different parts will be material you already know. First, for my blogger advertising network friends, let me introduce a few different concepts. If you run ads on your blog, you are a content provider or a publisher. The advertising spots you provide are your inventory, and you can sell them a lot of different ways. You could sell the directly to an advertiser, if you have the time and energy to try and find advertisers that will buy your inventory. Or, you could try to sell them through an advertising network.

For bloggers, the popular advertising networks are sites like Project Wonderful, EntreCard, CMF Ads, or Adgitize. I’m on all of those except Project Wonderful. Bloggers also often sell their advertising space through sites like Google Adwords or Amazon. Essentially, you want to get as much for your advertising space as possible. In addition, sites like EntreCard and Adjitize have a component to incentivize people to click on ads.

At the simplest level, there are three ways that people might buy ads, cost per thousand impressions, or CPM, cost per click, or CPC, and cost per action, or CPA. CPM is the easiest to understand. Every thousand times that your site shows a single advertisement, you get some amount for your ad. If your site is just selling a random stream of visitors, this is likely to be a very small number. However, if you’re site is known for drawing a particular type of people, you might be able to charge a higher amount for the thousand impressions.

Often, however, you bloggers buy or sell ads on different terms. With EntreCard, you buy an advertisement for a 24 hour period, which the blog owner can accept or reject. The popularity of a site, as reported by EntreCard is the number of people that have visited the site over the past five days and have ‘dropped a card’, essentially letting you know that they were there.

While dropping a card is an action, and you might think of this as CPA advertising, the real cost is for a period of time, and instead you can calculate and effective CPM or an effective CPA. It is further complicated by EntreCard taking a very large cut of the advertising revenue. Instead of getting cash, you get EntreCard credits which a special set of conditions you can get a cash value out of. It probably isn’t a very effective way of monetizing your website, but it can be fun.

With CMF Ads, people buy an ad slot for a thirty day period. Again, there is no guarantee to the number of impressions you’ll get over the thirty day period. It depends on how popular the blog is during that time, how many slots they have open, and how many ads they sell to rotate through these slots. You can set the rate that a slot costs and you can accept or reject advertisements. CMF Ads calculates an effective CPM rate, and you can buy ads at this rate.

Adgitize works a bit differently. You buy a slot in their pool of available ad impression. Initially, you bought a month long slot for $14. Later, they added other buying options. The ad is randomly displayed on all the participating sites and neither the buyer nor the seller as any say about which ads appear where. Sellers receive points for various activities, such as also being buyers, having current blog posts and visiting other sites. They points are converted to cash according to a hidden formula. I’ve found Adgitize to be a very effective medium for both buying and selling advertisements.

With Project Wonderful, you buy or sell a slot for a day in a bidding process. If you have the highest bid for a day, your ad runs. Again, you don’t know how many impressions you’ll get during the day. When I looked at this before, it seemed that effective CPM rates were quite low at Project Wonderful, and I haven’t chosen to connect up with them.

All of these sites use a standard 75x75 pixel advertisement.

Now, over to what the big boys do. If you’re a really big publisher, you sell your advertisements directly. The odds are that you’ll be selling them to some ad agency that is representing a client. For any leftover inventory, which was repeatedly talked about as ‘remnant’ at the conference, they may try to sell some of this through advertising networks.

There are various standard advertising formats that the large publishers and advertising networks support, and this includes the 75x75 pixel advertisements that is common in the blogging networks.

So, the first idea. Would it be possible to sell inventory from the blogger networks through advertising networks? Is there a potential arbitrage between the blogger networks and the advertising networks? Any blogging network that sells impressions out on the advertising networks is likely to impact advertisers within the blogging network. EntreCard tried this and it was a fiasco. However, they might have been able to do it more wisely and had it be successful, and Adgitize might be able to pull this off. In addition, an automated program to do this on Project Wonderful might work well, if Project Wonderful provides enough functionality.

The second idea ties together my Wall Street experience with the presentations today. Advertising exchanges are springing up as yet another layer between ad agencies and ad networks. One speaker compared ad exchanges to Nasdaq. Can ad exchanges be set up with standardized contracts so that they can trade like futures contracts in the financial markets? For example, can I buy a contract for 100,000 75x75 ads for a June 15th delivery? To the extent that they can be standardized, then trading data could be something that could be made available, potentially leading to more liquidity and a more efficient market.

Of course, this is where all the data networks come in and derivative trading becomes an interesting play. Could certain demographic targets become a tradable option. e.g. can I buy a contract for 50,000 75x75 ads for a June 16th delivery to women 18 to 30 in the northeast? These are likely to trade less often, but again standardized data like this could really open up some interesting trading options.

Who knows, maybe someone is already trying to arbitrage between the blogger advertising networks and the large advertising networks. Maybe someone is already tracking advertising trading data and even making a secondary market. If you know of people doing this, or interested in this let me know. If the ideas are also completely off the wall, or if they stimulate other out of the box ideas, let me know.