Why Video Publishers Should Stop Worrying And Learn to Love RTB

Digital video publishers are confronted constantly with new questions of how to best monetize their content, and more specifically, of how to handle their video ad inventory more  effectively. Ultimately, that’s a good problem to have. Internet users love watching and sharing videos, and brand advertisers are itching to place their messages in front of those eager eyes.

No wonder, then, that adoption of programmatic buying and selling of video has been so quick. Forrester Consulting recently forecast that real-time bidding (RTB) in video spending will reach $667 million by 2013, by which point a whopping quarter (25.4%) of all online video impressions will be delivered programmatically. Programmatic channels allow for unprecedented efficiency in selling inventory, and it allows publishers to monetize more inventory than ever. And yet, as with any rising technology, some are hesitant to adapt, and not all video publishers are convinced RTB is the future.

For publishers, control and transparency during the selling process are primary concerns, and the fear of losing either can make them wary of automation. There’s an apprehension of selling inventory to advertisers whose messages are irrelevant to or, worse, inappropriate for the publisher’s audience, or that the ads served on their site won’t be brand safe.

Fortunately, with RTB, those fears are unfounded. Compared to channels like blind ad networks, RTB offers very high levels of control and transparency.  Publishers should ensure that their RTB marketplace only allows vetted Demand Side Platforms (DSPs) and other buyers to bid on their impressions. 

Ultimately, RTB drives much greater demand for inventory — in an auction-based marketplace, and the increased competition among bidders leads to higher CPM rates for publishers — and even allows for more convenient packaging and selling of inventory. While publishers sometimes worry programmatic selling can devalue their inventory (the old “race to the bottom” opinion), RTB can actually increase its value. 

Another apprehension for some publishers is that implementing RTB might lead to sales teams and ad ops competing with each other for the same inventory. However, for a premium publisher, a private RTB marketplace should be regarded as simply another sales channel, not as an avenue for potential conflict.  Sales teams and private marketplaces each can do things the other can’t. For example, to execute a custom brand integration on its site, a publisher should use its sales team.  But a publisher can also offer its other inventory to a private marketplace and let it compete with its direct sold inventory.  Why not try to get a price higher than above or just under direct sold inventory when possible?  All buyers who compete for this inventory in a private marketplace have been approved by the publisher and those buyers are happy to for access to compete for premium inventory.

A forward-looking publisher can even use real-time bidding as a means to determine the rates for the inventory it sells direct. It can release some of its inventory into the exchange at or above rates for direct-sold campaigns, and if that inventory fetches consistently higher rates in RTB, the publisher may increase its rate card accordingly.

Sales teams sometimes fear RTB would cut into their revenues. However, there’s no reason for sales teams to suspect they’ll be replaced anytime soon. Maximizing the value of inventory still requires human relationships, trust and classic salesmanship. Programmatic channels can, in fact, help sales teams handle workflow — when they sell some inventory programmatically, sales talent can take the hours they previously would’ve spent booking and executing countless IOs, and instead build better sales strategies. And when sales representatives sell directly to DSPs and trading desks, they drive the relationship between brand and publisher, and they can be compensated rightly for the transactions executed through the exchange.

With their content in such high demand from users and ad inventory in such high demand from advertisers, publishers of online video need to move beyond the idea that RTB is better suited for some other kind of publisher.

Recommend
2 comments about "Why Video Publishers Should Stop Worrying And Learn to Love RTB".
  1. Ron Stitt from Fox Television Stations , January 31, 2013 at 3:04 p.m.
    I wouldn't necessarily disagree with you (actually, I agree) but what's a little odd about this post is that it reads like programmatic/RTB is a new thing to theorize about. But of course the trail has been blazed already on the display side, and as far as I can tell, the jury is still out there as to whether or not it's been such a boon to publishers. Certainly, all the arguments you're making here sound familiar...the same ones I was hearing to years ago from nascent RTB players on the display side.
  2. Marc Gaccione from LiveRail , February 1, 2013 at 10:36 a.m.
    Great stuff Mike. To Ron's point, a lot of this is a recurring theme about programmatic / RTB. Alleviating concerns over sales channel conflict, the role of control & transparency plays in that, leveraging RTB to help inform the direct-sold effort, using it to help find the high-water mark for specific inventory segments, etc. Perhaps continuing to hammer home the same theme will resonate at some point and not compare display RTB to video RTB. While certain basic learnings about ROI apply - others do not. Gauging whether or not to jump-in on the video RTB / private exchange bandwagon by comparing it to key learnings of a display-focused exchange is at best another recurring theme of the day. Many are taking a wait & see approach which is understandable, while others are embracing what you describe. They've decided that comparing apples to oranges is a fruitless cause. They're looking for more efficient ways to drive their video monetization strategy by leveraging leading-edge technology that compliments good old fashion selling. Bravo to that...