It was recently reported by Parks Associates that real-time bidding (RTB) accounts for 12% of total digital display advertising. While 12% may seem like a small percentage when you consider how much airtime the industry devotes to RTB, that 12% actually represents a roughly $800 million business.
RTB is quickly moving beyond its infancy and into its adolescent
stage of life. The first demand-side platform (DSP) was introduced in the early 2000s and it took less than one decade for DSPs to change the way that media had been bought and sold before.
We’ve already come a
long way since the inception of using data to reach audiences, and moved beyond initial challenges such as scale, standardization, and infrastructure. As a result, we now have search data, site-level
data, offline and online data flowing through our auction-based systems. Each of these positive steps and signs of growth help to push the industry; however, as with any stage of life, new challenges
Audience is still the name of the game for RTB, as emphasis is placed on buying the right user at the right time. If we know that a user is in the market for a new television, what does it matter if he/she is on a website that seems completely unrelated to electronics? The user has demonstrated either direct or indirect purchase intent for a television, so let’s show them an ad for one.
But while this thinking is grounded in a fundamentally sound theory, it leaves out one major piece of the equation: the location of the ad. I’m not talking about contextual placement. After all, RTB is about audiences -- not about contextual relevance. When I say “location,” I’m referring to the page that the actual ad is shown on. While it’s great that we have the ability to reach the right user at the right time, what’s the point of it all if the purchased ad is never seen by the user?
Conversely, if the placement is designed to make users accidentally click on ads, then the user may immediately navigate away from the site completely and campaign metrics simply don’t even hold true. The fact of the matter is that as technologies have become more sophisticated, marketers have noticed more data points surrounding what’s actually going on with their ad campaigns. As a result, ad placement and ad measurement have become pressing issues in RTB.
What the digital industry really needs is increased quality inventory and attribution models that take viewability into account. The adolescent stage of RTB is going to focus more heavily on inventory reliability and the ability to measure and monitor ad performance. Was the ad above the fold or below the fold? Which creative was displayed, and what inventory channel was responsible for the sale? With insight like these, publishers will have the opportunity to increase the value of their ad inventory, specifically for those sold on auction market. And, marketers will settle concerns about brand safety.
My prediction is that all inventory will eventually become biddable, except for custom executions. Creative is no longer flat in the data-driven world, as rich media and online video help to bring more branding dollars to the auction market. And as a result, RTB’s 12% will likely grow. It’s no secret that dollars drive innovation and demand. The opportunity in RTB is simply too big for publishers and for marketers not to execute against. The more dollars that flow into the data-driven market, the more publishers will get on board and move inventory to the exchanges -- which will in turn increase inventory quality.
This next stage will open up new doors for publishers to get in on the audience market. RTB is growing up.