At the Digiday Digital Publishing Summit in October, I had a chance to speak to a who’s who of publishers about some of the massive inefficiencies in the online display market, as well as the massive opportunity for publishers who embrace what we’re calling The Age of Automation.

During my presentation at the conference (if you missed it, you can watch it below), I outline the unique view the Rubicon Project has of the media buying ecosystem.  When I joined Rubicon 3 and half years ago, we were integrated with 200 ad networks and a few exchanges.  Today, that number is over 650 and includes rep firms, ad networks, demand side platforms, agency trading desks, and multiple exchanges.

In addition to defragmenting the media buying from these companies to drive publisher yield, the Rubicon Project’s REVV Platform offers a number of technology solutions for helping publishers maximize revenue, safely – including protecting publishers from channel conflict. Our proprietary Helix and AdCheq technology classifies every advertiser and every creative on our platform, protecting publishers from competitive advertisers and the types of ads they do not wish to see on their sites. To date, our platform has classified over 56,000 advertisers buying through third parties with over 6,000 of those advertisers now buying via real time bidding.

These technologies also give Rubicon a unique view of the inefficient way media is bought today.  For example, Visa – or really, Visa’s media buying agency – is using over 40 third party demand sources who have trafficked over 2,400 creatives.  Ironically Google’s Display Network is the biggest ad network in the world, and Google also happen to own DSP Invite Media, yet they buy media from over 50 third parties, including multiple DSPs. In addition, Google’s agency has trafficked over over 3,500 creatives – as classified by REVV – through all of these third parties. Ad Operations experts estimate it takes 30 minutes to traffic a creative, so if you do the math, Google’s creatives take 105,000 minutes to traffic.

This clearly illustrates the massive amount of inefficiency that remains in the market. And, like everything in the online advertising market, massive inefficiency is a portal into massive opportunity.

We are at the dawn of the Age of Automation in online advertising. Although still in its infancy, the Age of Automation has already started to deliver more efficiency, increased advertiser performance, and better CPMs and controls for publishers.  Real Time Bidding is real, delivering 3-5x the average CPMs for publishers, better campaign results for advertisers, and is by far the fastest growing segment of the market. The Age of Automation is a good thing.  There is no need to fear it.  It is bringing unprecedented visibility, controls, and insights for both buyers and sellers.

The Age of Automation has huge potential revenue implications.  As digital media superstar Darren Herman pointed out on his blog and Business Insider (http://bit.ly/rKmCc5), the top 5 publishers in the world control 64% of all online spending.  In display advertising, the IAB reported that the Top 10 Publishers collected 72% of the total revenue in 2010, a stat that has remained consistent over the last 10 years.  It should come as no surprise that Google, Microsoft, AOL, and Yahoo are all placing huge bets on how to protect their disproportionate share of online spending.  One of the biggest drivers behind the huge disparity between the Top 10 Publishers and the rest of the Top 500 is that the Top 10 are easy to buy.  In the Age Of Automation, though, it will be just as easy to buy the Top 500, and we believe this will foster a huge shift in dollars benefitting the ecosystem – but maybe not benefiting the Top 5.