RTM Also Stands For Relevantly-Targeted Media

by , Jan 15, 2013, 8:56 AM
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It’s only Day Two of RTM Daily, and I’m already thinking of repositioning what the acronym stands for. If you took the time to slog through yesterday’s opening manifesto, you know the R and T stand for real-time, and the M represents media, marketing or any other meme you’d like to put in there. But based on some new research being released today on the effectiveness of real-time audience buys, I’m going to suggest we begin referring to RTM as, “relevantly-targeted media.”

The new research from mobile ad-buying platform Adfonic, shows that mobile ads bought through programmatic exchanges are much more effective than those bought by people. The reason, the report seems to suggest, is that the data and algorithms driving those programmatic buys are more attuned to what offers other people -- you know, the consumers -- are actually interested in clicking on, or through to.

“[Real-time bidding] works in a similar way to stock exchanges and online auction sites, using big data and smart algorithms to determine the best mobile sites and apps for a campaign based on goals set by buyers,” reads the report, which goes on to reveal that, based on “billions of ad impressions” processed through its platform, “algorithmic trading of ads” increased click-through rates an average of 97% over comparable ads placed the old-fashioned human being way.

“For some advertiser verticals such as Style and Fashion, the uplift is 231%,” the report continues, “showing that the algorithmic trading approach of RTB is highly effective at finding the right ad impressions for the right audiences.

The findings are important for several reasons. One is that many people still think of real-time media-buying as an efficiency play -- that they can purchase media impressions more cheaply because of the auction-based nature of programmatic trading. That may or may not be true, of course. And there certainly are many cases where publishers say they reap higher yields from their programmatic sales than from their direct sales forces. The truth is, yields will always be based on supply-and-demand, whether they are human buys or machine-based buys, but the human ones will always factor in more intangibles -- for better or worse CPM yields. Once people set their goals, the machine-based deals will run based on pure logic and delivery, until they are adjusted in as close to real-time as the people managing those trades possible can.

I’m working on a piece -- a profile of the top trader at one of Madison Avenue’s big agency trading desks -- that demonstrates this man-machine interaction, and I think you’ll be surprised by some of the ways it works best. Look for that next week. Meanwhile, the Adfonic findings are important, because they reveal that programmatic trading isn’t just efficient, but more effective at achieving goals when the right parameters are set. The reason, says Adfonic, is that programmatic buys are using real-time data, based on real-time consumer interests and behaviors to serve ads and offers to people in real-time, thereby making them more relevant, and (this is the important part) more timely.

The last reason why the Adfonic report is significant, is it comes a day after we reported on Interpublic’s Magna unit’s report predicting a relatively slow rate of expansion for mobile programmatic buys -- mainly because of the paucity of data available to target users via mobile.

It’s a problem, for sure, and it will definitely be one of the impediments holding mobile, as well as the overall programmatic marketplace back, but as Adfonic shows, it’s not insurmountable. While it may require a greater leap of faith than browser-based cookie targeting in the front-end of the process, the same back-end metrics apply: click-throughs, actions, results. And that in the end is what some people -- media buyers, advertisers and brand managers -- really want the people receiving those ads to do, right?

 

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