Looking At The Auction Marketplace From Other Perspectives

by Gus Spathis, Jan 17, 2013, 12:57 PM

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The world of auction-based media is a fascinating space with rich detail into data and numbers. In fact, the details of the numbers and speed behind programmatic media buying are so rich that it’s easy to lose the sense of scale. By looking at real-time bidding (RTB) numbers from other perspectives, marketers will have a better idea of scale and the depth of ad technology we are dealing with in today’s marketplace.

Let’s start by looking at AppNexus’ publicly stated 800K QPS. The definition of QPS is queries per second, which generally means the number of auctions that take place in one second. AppNexus sees 50 to 70 billion auctions per day.

To put this in a simple perspective, this number (50 to 70 billion) is similar to the number of nerves in a single brain. We can also compare AppNexus to the stock market. AppNexus trades more in 41 minutes than Nasdaq (average is about two billion trades shares per day).  

Another scalable infrastructure to look at is Facebook. With 900 million users, the Facebook Exchange represents a huge opportunity for scale and reach within the auction marketplace. Simply put, if Facebook were a country, it would be the third-largest in the world -- just behind China with its population of 1.3 billion.

In RTB, scale also means having the power to process data at rapid speed. From the time a request comes in, each bidder has 100 milliseconds to respond. In that time, a bidder has to locate the user the impression is for, determine the value of an impression by this user of one or more campaigns, and finally place the bid and record all the needed information. What this means is that each bidder request operates between three and four times faster than the blink of an eye, and about half as fast as the time it take for the human brain to recognize a face. Talk about speed!

When you look at RTB numbers compared to tangible stats, you can begin to understand where we stand as an industry. Parks Associates recently reported that RTB technology will support roughly 50% of the display ad volume in North America in five years. In addition, by 2015, eMarketer predicts that RTB will account for 25% of display ad spending. The fact is that RTB's growth, scale and speed have accelerated rapidly, especially when you consider that it was introduced just after 2001.We have already come a long way, and this industry will only continue to become more scalable as better infrastructure is produced and key lessons from the world of programmatic media buying are refined.

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