Real-Time Bidding Myths Busted

More and more publishers are contemplating the value of the real-time bidding (RTB) model, but concerns are keeping many from taking full advantage of it. Some publishers fear that with RTB, they are losing control over how access is being granted to their inventory, while at the same time potentially reducing ad quality standards. Others fear the platform is too complex and requires too many resources in order to adapt to publishers’ needs.

It’s not surprising, given the fast-paced and often confusing nature of the space, that these misconceptions have been formed -- but they are misguided. The truth is, RTB can represent a meaningful addition to a publisher’s monetization strategy. To do so, however, requires a clear distinction between fact and fiction.

Here is my attempt to clear up some of those myths that publishers hear about RTB:

Myth #1 – What’s good for buyers is bad for sellers.

Fact – Publishers are in the driver's seat, and make the decisions.

Publishers decide who gets access to what impressions and at what price, and these decisions are based on real pricing intelligence derived from actual bid data.

With RTB, buyers are looking for more control of their buys, specific impressions and a higher degree of transparency and granularity. These demands from buyers add to the concern that publishers fear the most: cannibalization of their inventory, ultimately leading to an erosion of their direct sales channels.

These concerns can be eliminated if publishers are empowered by their channel partner, such as a sell-side platform (SSP), to make their impressions available the right way through the RTB model. Publishers can use a wealth of information and controls to help them strategically enable the demand they wouldn’t otherwise have access to via direct sales. This creates a win-win for both publishers and buyers. Publishers are able to make their inventory available to buyers in a way that not only protects their direct channel, but also enhances the depth and breadth of those relationships, while opening up new revenue opportunities. Buyers get what they want, while working within a framework that publishers are confident and comfortable with.

Myth #2 – An impression is an impression is an impression.

Fact – Environment really does matter.

The common publishers' concern is that value is determined at the impression level only, and they lose when a buyer that wants high value audiences ends up finding them on a cheaper quality site for a cheaper price. The reality is that all impressions are not created equal -- and environment does, in fact, play an extremely important role in advertisers’ willingness to bid. 

The move toward quality that continues in our industry is by no means lost on RTB. Recent articles identifying the major buy-side concerns relating to the glut of low-quality impressions (e.g., Torrent sites and manga sites) being represented across numerous exchanges, in addition to industry momentum around viewable impressions, all serve to validate the importance of environment and the value of one impression over another.

Myth #3 – The machines are taking over.

Fact – Relationships are more important than ever.

Despite the automation inherent in the RTB model, people still need to be working with one another. Publishers that develop relationships with demand-side platforms (DSPs) and agency trading desks (ATDs) are in a position to directly affect the consideration and value among those buyers. At the end of the day, people like to work with people they trust, and leveraging these relationships and continuing the dialogue with the buy-side still matters. 

Publishers need to position themselves to be able to use the machines intelligently, making their inventory available via the automated channels. However, their ability to communicate value and present opportunities to buyers depends on the strength of their relationships.

Myth #4 – RTB is rigid and inflexible.

Fact – Publishers can customize how they choose to leverage RTB according to their specific needs.

Publishers view RTB as a highly complex, daunting process with limited flexibility, only accessible through open market exchanges. That's not the case. A publisher’s approach to RTB can be seamlessly customized and accessible through either open or private exchanges. RTB gives publishers the ability to control everything: the level of transparency they choose to set, the corresponding prices, which DSP to work with, which agencies, and even which brands have access to their inventory.

RTB has become a vital part of selling online. In order for publishers to maximize the value of the channel and see greater results, they need to continue to gain more knowledge of the model. In the end, RTB adds significant value to their direct sales without taking away their control. A keener understanding of market mechanics and more control over the processes involved in RTB will encourage greater participation by those on the supply and demand side of the equation.

 

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1 comment about "Real-Time Bidding Myths Busted".
  1. Will Beamen from Big Media , February 1, 2013 at 12:15 a.m.
    Alex, can you please name a major publisher who has benefitted from RTB....? who actually sees overall CPMs increase and total revenue increase? Let's bust the real myth.....There is no data for RTB players to target by other than the Advertiser's data (retargeting) and some data exchanges (blue kai, exe late)...if you take out retargeting data......performance plummets and every RTB player is left with their pants down.