29. Bill Urschel – the captain of Ad:ECN, the first exchange

Paleo Ad Tech

Bill Urshel was CEO and co-founder of Ad:ECN, an early ad exchange started in 2003 and acquired by Microsoft on the same day it acquired aQuantive, Razorfish and Atlas in 2007. Bill’s partner and third sales hire at Ad:ECN was none other than Jeff Green, then a recruit from the tiny L.A. agency 411 Interactive and now of course CEO of The Trade Desk.

Currently, Bill is President & Captain of Alaska Endeavour, a non-profit research vessel and organization that promotes scientific exploration, research and conservation. He and his wife live full-time on the 75-foot boat, which used to be a prisoner transport for Alcatraz.

As Bill tells Marty and Jill in this dramatic episode, the Ad:ECN story began in a supermarket line in Santa Barbara in 2002. He had been involved in a few software companies and was looking for his next idea when he ran into an acquaintance, a prolific if eccentric engineer named Denny Bollay. Bollay founded a company called ExperTelligence in the 1980s and had three concepts to pitch, one of which was a proto-online auction system he was calling the Advertising Commerce Network.

The following year, 2003, Urschel and Bollay formed ExperClick from the existing and not-quite-working assets of the auction system, with Urschel as CEO and Bollay as CTO. “It was a feverish time in ad tech,” admits Urshel, when start-ups could “smell the money” despite raw memories of the recent dot-com bust. Even in a sunny southern backwater such as Greater Santa Barbara, California, a clique of click-crazy ventures including ExperClick, ValueClick and later Commission Junction really clicked.

ExperClick company photo from 2005 – Bill Urschel is in the back row on the end in the ocean-blue shirt standing next to Denison Bollay; Jeff Green is on the front row in (yes) green.

The original idea was simply to automate the manual process of buying and selling inventory on ad networks. At least, it sounds simple. But from all accounts, Bollay’s original code and his working style were not productive, and he ended up leaving the company on unfriendly and legally-mediated terms.

But joy came in the morning: one of ExperClick’s sales execs recommended a clean-cut young man name named Jeff Green who was buying media at a small L.A.-based agency called 411 Interactive, and Jeff was hired as a technical sales lead. In a development that will surprise none of #PaleoAdTech’s loyal listeners, Green turned out to be a “product driver,” visionary, nexus of mojo and force for good vibrations in the halls of ExperClick, which was renamed Ad:ECN.

The “ECN” stands for Electronic Communication Network, borrowed from financial markets such as Archipelago. It is not the same thing as an “exchange,” but we’ll table that debate for another episode.

The stock market analogy occurred to others at the time, including NYC-based Right Media and a brain trust within Microsoft to the north. (The debate whether Ad:ECN or Right Media built the first true ad exchange hinges on semantics, with Urschel doubting RM’s claim.) More apposite to the Ad:ECN story, an engineer named Brian Burdick and others on Microsoft’s adCenter team wrote a widely-circulated white paper proposing an Open Listings Exchange (OLX), which ran up against Bill Gates’ reluctance to commit the requested 1,000 engineers.

(A very vivid account of Microsoft’s misadventures in digital advertising was written by Eric Picard for AdExchanger in 2015; it touches on Ad:ECN, describing it as a fall-back after a failed bid for DoubleClick, and a product that “didn’t quite meet the technical need we envisioned for OLX” in 2007.)

Urschel and Green found some success with their auction model for ad networks in the U.K., a smaller market, and eventually signed up 39 ad networks as members of its ad network-only exchange, charging a flat fee. It was based in Carpinteria, a lavishly-appointed suburb south of Santa Barbara.

And then the sharknado poised, as Google acquired DoubleClick for $3.1 billion, Yahoo acquired Right Media … and Microsoft acquired Ad:ECN for a rumored $50-75 million, a deal that was comically overshadowed by Microsoft’s simultaneous acquisition of aQuantive (including the Atlas ad server and Razorfish agency) for over $6 billion. (“We kind of felt like we were a bauble, in a way.”)

As Urschel describes the deal, it unfolded rapidly. He’d pitched Microsoft on joining the exchange in 2006. The following year, he and Green were at an AdTech conference and the aforementioned Eric Picard and Jed Nahum dropped by Ad:ECN’s booth and “asked some kind of interesting questions.” Drinks ensued and “we had a statement of interest within a few days.”

A well-appointed Bill Urschel and Jeff Green manning the AdECN booth at AdTech in 2007 – a fateful day

Urschel moved to Seattle and Green stayed in Southern California. Both posted on staff for two contracted years, but Urschel’s experience at Microsoft was “both disappointing and charming.” As a peewee player in the internal celebrity deathmatch among aQuantive, Microsoft’s byzantine culture and rapidly-refocusing ad tech vision, Ad:ECN never really got a chance to thrive. It was shut down in favor of AppNexus in 2011. A year later, Microsoft wrote down its $6.2 billion aQuantive investment, leaving little to show for its great buying spree of four years before.

After leaving Microsoft, Urschel developed two companies with a similar thesis: to map the “topology of the internet” based on topics and relevance, and to make a quality score (based on search-like inbound links) available to ad networks – and eventually advertisers and publishers – to improve their targeting and bidding intelligence. The first was called A6 and the second Tersai. Both eventually shut down via asset sales, and Captain Bill Urschel decided to devote himself full-time to his lifelong passion for hydrated natural history.

Urschel’s memories of ad tech are definitely mixed. During his A6/Tersai saga, he says, his data scientists’ findings were sobering: fully 92% of the advertising inventory they discovered was “worthless and not worth bidding on,” meaning only 8% had value. Fraud and junk pervaded the space, and the system itself relied on participants’ willful blindness and self-inflicted amnesia. (Echoes of Facebook’s widely-reported observation on shutting down its open web test on Atlas – yes, the same Atlas, acquired from Microsoft in 2013, along with Microsoft’s David Jakubowski – that they were “amazed by the volume of valueless inventory.”) It was and is a business with some existential caveats.

On the other hand, Alaska Endeavour regularly hosts expeditions staffed with non-programmatic worthies such as archeologists, paleontologists, biologists, glaciologists, natural historians and smart civilians, improving the world one fossil and finding at a time. If you’re interested in supporting the vessel and its expeditions, you can subscribe to the Captain’s Log newsletter and become a member here. Ahoy.