• by Andrew Casale , January 17, 2012

The introduction of real-time bidding (RTB) has dramatically changed the mechanics behind inventory valuation. Publishers must take a closer look at their sales channel partners to maximize value. RTB, a data-driven buying model, allows advertisers to bid on qualified display media in real-time, at the impression level.

Publishers must maintain control over impressions to assure that inventory value is retained, direct sales channels preserved and the audience experience is upheld.

RTB requires the introduction of additional relationships, such as demand side platforms (DSPs) and agency trading desks, which could further dilute a publisher’s control in the transaction. A DSP aggregates impressions from various sources and adds a layer of user data to identify specific audiences required by advertisers. DSPs then work with channel partners, like ad exchanges, to regulate the type of inventory entering the marketplace.

Publishers need to understand these relationships and work with their channel partners to incorporate them into the parameters. This means asking partners the right questions:

How closely do you work with DSPs?

Channel partners that have the closest integrations with their DSP partners will be able to provide the most flexibility when it comes to implementing mechanisms to augment controls over who and how they are bidding on your inventory.

How granular do your advertiser controls get?

Advertising is an integral part of the user experience, along with actual content, of course. Publishers need to be able to filter out irrelevant ad categories, problematic brands and even some creative that may diminish the value of the content on a page and deter users.

How can you avoid channel conflicts?

The rate of a buyer’s bid is largely dependent on the exact location of an impression. Channel partners should give guarantees that advertisers, brands and verticals that pose a channel conflict can be selectively blocked and that this setting is proactively maintained --even when inventory is sold at the exchange level.

What is the vetting process for your advertising partners?

Publishers expose their inventory to a larger swath of advertisers when utilizing RTB, which theoretically improves eCPMs. However, just because an ad partner can promise more advertisers doesn’t mean any advertiser will do. Ad partners should vet advertisers before including them in the process. Publishers should investigate the degree of controls they have over who and what is eligible to run on their site.

How do you motivate bidding?

To maximize RTB results, the marketplace must be saturated with buyers, and those buyers must be confident they are getting value for money. Partners must know where buyers see value -- because sheer volume or sole reliance on third-party data is not a good enough answer.

How do you optimize bid solicitation?

RTB partners are required to make decisions about hundreds of bidders in milliseconds, and it takes multiple partners for RTB to run smoothly. Monetization partners should have protocols in place that allow for smooth communication between all parties with minimal errors and overhead.

Can I set reserve bids?

Auctions inherently attract buyers looking to get the most for their money, but publishers should be able to protect their brand value by setting reserve prices. This gives publishers a say in how inventory is priced, without introducing inefficiencies into the process.

What is the value of a private exchange?

Factors like reputation and publisher caliber carry less weight in the RTB world than publishers are used to, which can lead to below-par inventory valuations. In some cases, it may be beneficial to strike a deal within the RTB framework with an advertiser you already know is highly interested in your publication. This tactic gives publishers some control in a market that typically has complete control over inventory value.

RTB is becoming a vital part of selling online, so publishers should remain vigilant when introducing partners into the mix.