The Time Has Come For Mobile RTB

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First, RTB in mobile is at a tipping point today. Second, there are significant technological differences between RTB as commonly known and applied in online digital advertising, and RTB in mobile advertising. That said, MediaPost has chosen the right time to offer a dedicated column that addresses the ins and outs of RTB advertising whether for display, mobile or video.

As such, I think establishing some building blocks as a foundation for future articles might be the best place to start.

If you are involved in digital advertising, you are probably aware of RTB, a common capability of online advertising that occurs through a demand-side platform (DSP).  A DSP enables advertisers to place a bid on an impression based on their perceived value of a web viewer using pre-determined targeting criteria. The bidding is done within milliseconds on an impression-by-impression basis, not through a bulk-buy ahead of time. If there are multiple advertisers bidding, the highest bidder wins the placement (usually at one penny more than the second highest bid - better known as a “Dutch auction”), and a targeted ad unit is delivered.

The RTB process is becoming more common in mobile advertising, bringing along many proven benefits along with a unique set of new opportunities and challenges. Moreover, the advent and expansion of RTB in online and mobile advertising overall has opened to door for a much more transparent, efficient and measurable marketplace. This is where RTB will get very interesting.

In online display RTB, cookies are used as they have been for some time in traditional networks, to track and target a viewer’s behavior (audience targeting) and then determine the value of that viewer for a potential advertiser. Here n lies the rub for mobile RTB (although one could also argue its advantage): Cookies are technically deficient in mobile. As a result, cookie-based behavioral data that is available to online digital RTBs is simply not available in mobile.

For RTB to be effective in mobile, data must be aggregated from various sources and modeled using complex algorithms that can provide predictive results. In other words, hundreds of data sources and historical results provide a mathematical picture to determine when, where and whom to serve an impression to.

Much has been written about the sensitivities surrounding “cookies” that track personal behavior when consumers browse the web. Not only are consumer watchdog groups lobbying for legislation to restrict the information collected on individuals, but the FTC is also taking a hard look at how personal data is tracked and stored. Even Microsoft’s newest IE release has a built-in default to prevent behavioral tracking.

Amazingly, the limitations of a cookie-less mobile RTB system have spurned innovation that actually may raise questions in the near future about how and when to use pure cookie-based audience targeting. It is entirely possible that the data-driven approach born in mobile RTB may in fact provide a new path for online to follow in the near future.

The evolution of RTB in both online and mobile is just the beginning of a paradigm shift in digital advertising. This shift will move us quickly toward a data-driven, result-oriented advertising marketplace re-founded on cost efficiencies and beyond-the-click measurability. Mobile RTB is leading this shift, and will become even more important as we progress to the future. I look forward to continuing this dialogue, and I welcome your comments along the way.

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3 comments on "The Time Has Come For Mobile RTB".

1. Norm Page from Same Page Capital, LLC
   

   commented on: November 10, 2012 at 10:32 a.m.
   Let's not lose sight of the fact that RTB - "real-time bidding" - has been around for ages (and arguably DSP, that is "demand side platform"). Flycast, Right Media, and oh yea Advertising.com built pretty decent little businesses from it. Multiple billions of dollars were spent on acquiring their technologies. What's completely changed these definitions has been the fruition of data, which brings a whole new y-axis to an otherwise pretty flat and boring x-axis. So if you assume that today's defined RTB and DSP work off not only Display data, but also Audience data, then one would assume that "Mobile RTB" means exactly that: real-time bidding on Media + Audience data in Mobile. What? No cookies? No Audience data? Then Mobile is back to square 1 circa 1997. Question is, How does the Mobile landscape change in order to get up to par with Display? What steps need to take place? My thoughts: As usual, the required shifts have all occurred already (anyone remember the public and industry outcry to DCLK + Abacus = Audience Targeting brouhaha?). Just study the history of digital media and avoid re-creating the (square) wheel(s).
2. James Lamberti from AdTruth
   

   commented on: November 12, 2012 at 6:06 p.m.
   Thanks for this great article on the importance of mobile advertising. Unfortunately, cookies simply don't work on mobile devices and marketers have few other options. In fact, in a recent survey, almost half of marketers said that mobile tracking is their biggest concern. As you mentioned, cookies don’t work and other solutions such as UDID and IFA only work in-app or raise serious privacy concerns. In order to move advertising forward with the mobile-obsessed world, marketers need to find a universal solution that will keep the interests of consumers and marketers in mind. You can read more about the need for mobile tracking here: http://blog.adtruth.com/marketers-1-concern-mobile-tracking-and-measurement-way-beyond-cost-privacy-and-scaling/.
3. Mike Skladony from Semcasting, Inc.
   

   commented on: November 14, 2012 at 9:32 a.m.
   Interesting Article.....Semcasting's IP Zone technology is DNT compliant, cookie free and outperforms behavioral targeting by an average of 128%. We target the modem not the browser, so once your in the home we target the phones or tablets while they are connected to the wifi. Check it out - www.semcasting.com

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