Marcus Austin talks to William Urschel, CEO of the new 'stock exchange' for online advertising.

Imagine being able to build an advertising spot on your website and have fifteen people bid for that spot in an online auction, and then being able to display the winning advert, and doing all of that in less than 12 milliseconds. Sounds too good to be true? Well it's not, and it all went live today.

The new "stock exchange" that matches advertisers and publishers is called AdECN and the owners have chosen the UK as the first place in the World to take advantage of the exchange. The exchange like other exchanges is a closed system, and the brokers - in this case it's a select bunch of advertising agencies - manage all of the companies wanting to buy and sell advertising spots. If it wasn't restricted to just the agencies it's doubtful that they would be able to do everything in 12 milliseconds.

Why have they chosen the UK? The answer is the UK's growth in online ad revenue is currently the strongest in the World. According to William Urschel, CEO at AdECN. "In 2006 Worldwide online advertising revenue was $4.5 billion and spending was up more than 30% from the previous year in the United States, in the UK growth was more than 40%, which makes the UK and ideal place to pilot the exchange."

So why the need for an exchange? Although advertising revenue is rising fast, AdECN believes it could have been rising even faster. AdECN estimates that half of the inventory of the largest publishers went unsold, and most advertisers would have spent more if there were something intelligent to spend it on, the AdECN exchange makes it easier to find the spots and the advertisers.

So will this add a huge cost to advertising and selling ad space in the UK? According to Urschel, it won't. "Our business model is simple. We sell seats on the AdECN exchange to ad networks, and then charge the members a small flat fee (1.5p per 1000) for each buy and sell transaction they execute on the exchange."

Urschel is also keen to point out that the system includes some intelligence in the way it works. "To submit an ad slot the ad networks have to define the type of ad required and the type of site and page that the ad will sit in. However after we place the ad we scan the page to do our own semantic analyses on the page, so that we only place appropriate ads next to appropriate content. Likewise, we also test the ads that are placed in the slots, to make sure that they are what they say they are."

The system has been trialled in the US for the last year. However, the switch on today will be the first big test of the system. Even with just the current number of brokers the 12 millisecond time may stretch a little. While all of the agencies are based in the UK, all of the hardware is in the US, and although Urschel is confident their network is robust, we'll know for definite if it is over the next few days and weeks.