Ad Industry Wants RTB, But Misconceptions Could Stifle Growth

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Publishers, agencies and advertisers want to tap into real-time bidding and programmatic ad buying, but a disconnect separates perception, expectations, and a realistic understanding of the technology, according to a study schedule for release Monday.

The Casale Media survey, conducted by Advertiser Perceptions, found media buyers want to see greater emphasis on inventory quality, more guarantees for brand safety, and greater transparency in reporting. For publishers, 84% are concerned RTB will devalue or commoditize their inventory, and 75% fear sales channel conflicts and eroding relationships with media buyers.

The study found advertisers and publishers like to network and form human relationships. In fact, one in four publishers are concerned that programmatic buying will eliminate the "human element" in ad selling.

"The biggest eye opener was an overwhelming awareness of RTB, which underscores the growth, but it's not without problems," said Andrew Casale, as VP of strategy at Casale Media.

For agencies and marketers, some of the biggest concerns revolve around quality of impressions, 77%; guarantee of brand safety, 70%; transparency in the process, 65%; ease of distinguishing between supply sources, 64%; more creative options and formats, 54%; technical understanding of the process, 53; and an increase of demand side platforms (DSPs) from which to choose, 36%.

There remains a strong disconnect between what agencies and marketers believe important and their satisfaction with them. For example, 88% of agencies and marketers cite performance, return on investment as the most important RTB attribute, yet only 38% said they are satisfied with their ROI. Targeting options come in at 86% and 32%, and inventory quality at 81% and 25%, respectively.

The industry needs a better understanding of programmatic ad buying and how it supports real-time bidding. The study suggests more than half of advertises and publishers already participate in RTB and expect the market to grow significantly during the next 12 months.

Overall, 94% of publishers are aware of the technology, compared with 90% of agency experts and marketers. About 74% of publishers have a basic understanding of how it works, compared with 81% of agencies and marketers.

Some 84% of publishers are familiar with demand side platforms and private ad exchanges; 80%, agency trading desks; 76%, open ad exchanges; 74%, supply-side platforms; and 64%, data management platforms. Recognition was slightly less on the buy side, with 90% of agency and marketers admitting they're aware, and 81% have a basic understanding.

Agencies and advertisers are most satisfied with performance, Casale said.

Publishers said 19% of their inventory will sell through RTB a year from now, compared with 10% now, and 6% a year ago. That's not much different compared with agencies and marketers, who said 21%, 13% and 6%, respectively.

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3 comments on "Ad Industry Wants RTB, But Misconceptions Could Stifle Growth".

1. Rick Monihan from None
   

   commented on: October 8, 2012 at 9:48 a.m.
   The problem of RTB remains one of misplaced expectations. The idea is, and it is correct, that programmatic buying can alleviate many of the issues we face in the negotiation, operations, and billing arenas. The problem is that the expectations of gains were set in areas which have yet to be fully figured out in the direct sales arena - so why would RTB perform better in these areas just because it's automated? The real gains will become apparent in areas that tend to fly below the radar. Lower operational costs in terms of manpower, management, stewardship and billing. Simply removing issues of discrepancy and human error represent massive productivity gains for even the smallest of organizations. Unfortunately, these are not parts of the business we tend to spend long hours thinking about or studying. We consider them a part of the business and rarely try to value them. It is my opinion that the real gains to programmatic buying will not come in improving ROI, and I certainly do not believe it will undermine or commoditize the business, particularly if inventory is closely managed and results reviewed carefully. These areas should show some improvements, but the reality is that direct sales will be more important in an automated sales environment. A screen which simply spits out the best targeted, lowest priced inventory without careful consideration on evironment, customization or brand alignment will eventually lead to a never-ending spiral downward of both price and quality. However, programmatic buying can alleviate some of the sand in the gears of the sales process, and make it smoother and more manageable.
2. Ross Bradley from Qeg Pty Ltd
   

   commented on: October 10, 2012 at 1:17 a.m.
   In today's (Laurie Sullivan) article, she points out that "audience targeting" will be key to increased CPM prices of exchange impressions: "Emerging ad types and pricing models will get a bigger share of budgets by 2017, according to the report. Program media, fueled by audience targeting, will offer the best performance. As marketers compete for similar audience segments and number of bids increase, average CPM prices of exchange impressions will rise from $3.17 to $6.64 by 2017." Read more: http://www.mediapost.com/publications/article/184807/forrester-data-programmatic-buying-to-support-2.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+online-media-daily+%28MediaPost+%7C+Online+Media+Daily%29#ixzz28oJYWlAI Should the industry settle on 'viewable ads', the ROI for publishers will be even greater, resulting from a more robust auction for both targeted and re-targeted users - wherever they may land, across the marketplace. And with advertisers (from within a/the market a user is being targeted), pitching for that RT impression. (Within the 27 or, more global markets that Google, + others, now reach.) I posted my own 'wish-list' (for what's to come) in a recent blog, here: http://seekingalpha.com/instablog/36191-lookingconfident/1133831-the-ultimate-in-rtb-programmatic-buying-where-no-publisher-gets-left-behind
3. Howie Schwartz from Human Demand
   

   commented on: October 12, 2012 at 7:19 a.m.
   The gap / misunderstanding of RTB in Mobile is even greater. The adtech on Mobile is just not as mature as it is on desktop YET (its catching up - in my opinion it used to be a year behind, then 6 months, and now its a quarter behind) Audience data (within a lack of mobile cookies) is the next big push on mobile RTB that will help it / us scale nicely

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