• by Iggy Fanlo , September 13, 2011

Last year, real-time bidding established itself as a rising star in online advertising, growing from minimal adoption to 88% of advertisers planning to buy that way in 2011. This staggering growth quantifies what has become clear to many people in the digital media industry: RTB could redefine the norms of buying and selling media.

Yet compared with growth among advertisers, publisher uptake of RTB has not been as robust. According to a report from eMarketer, only 44% of Web publishers will leverage RTB in 2011, exactly half the aforementioned proportion of advertisers.

While publishers of all sizes have the capability to sell to real-time bidders, premium sites in particular fear that it will commoditize inventory.

Advertisers have been receiving clear benefits from technology innovations including RTB, DSPs, retargeting companies and even agencies themselves. With an entire ecosystem in place to benefit buyers, publishers are understandably concerned that their inventory is not properly valued unless they're selling direct.

Publishers are also bogged down by manual processes that prevent real-time determinations of their audience's value. In short, a technology gap has put publishers at a disadvantage for the billions of online ad transactions happening every day.

I believe the key to bridging the technology gap between publishers and advertisers will be real-time pricing. The concept of RTP acknowledges that a publisher's inventory can rapidly change in value, and that publishers have to be able to act quickly when this change happens.

For instance, when publishers cover popular topics, they generally will see a spike in traffic. Let's say a tech site gets the scoop on a major acquisition and the story goes viral, quadrupling their normal traffic. Suddenly, the ad real estate next to this trending story is worth much more than previous stories on the site.

In this scenario, RTP would automatically make an adjustment, enabling publishers to dynamically adjust the price of impressions to match the upper levels of what brand advertisers are willing to pay. Similar to buyers using third-party audience data to optimize their purchases, publishers should consider those factors along with their own first-party data to automatically set prices for each impression.

By combining these with dayparting, content type and ad placement, publishers can unlock the real-time value of their inventory and ensure money is not left on the table.

In the end, real-time pricing isn't about giving the publishers the upper hand over advertisers. It's about leveling the playing field between publishers and advertisers and revealing the true value of online inventory, which should be somewhere between current direct sales prices and RTB prices.

The productivity gains of RTB will not be worthwhile until the industry makes it beneficial and profitable for publishers to sell through that channel. RTP is the best bet to get us to that point.