The Future of TV Advertising Lies In RTB

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Real-time bidding has become so entrenched in online media buying that it’s hard to believe this market was nonexistent two years ago. Marketers have utilized the technologies to target consumers who are most likely to convert, serving creative that drives a consumer back to a website to make a purchase.

But RTB can do so much more than serve as a line item on a media plan. In a world where the biggest of traditional channels – TV – is becoming increasingly fragmented, RTB has a lot of potential. While TV is still the best choice for building a brand, DVR and video on demand shrink the overall number of consumers who are exposed to ads, forcing advertisers to adjust. The data capabilities of RTB can fill in the gaps for reaching a mass audience with a brand message.

The prevalent way RTB is used right now is to target users based on their behaviors on a site, which only leverages part of the available data. Many are not utilizing a combination of behavioral and content data, which gives advertisers a look at the content that users are consuming, in real-time. Scoring impressions based on content makes it very easy to align RTB display with simultaneous TV campaigns.

Every execution is different, and there are a number of possibilities. For example, if advertisers run a TV plan that only shows during prime time, Monday through Thursday, RTB allows them to tailor display campaigns to match. So, not only are they targeting across screens during the same time frame, but they can also target those content types. Think of someone who turns to a laptop to check fantasy stats while Monday Night Football goes to commercial. The advertiser hits that consumer, at a greater effective cost.

This should shake perceptions that RTB is strictly a DR tactic as well. If you’re running RTB alongside TV, there’s a clear opportunity for brand advertisers to raise awareness. Entertainment advertisers could benefit largely, because their campaign strategies typically involve spending a great deal of money in a short time. If they’re not utilizing RTB in the online portion of the campaign, then they’re either making a direct buy, which limits audience, or they’re using a network to spray ads across several sites and hope they’re hitting an interested audience.

An advertiser ipromoting a film through “The Walking Dead” on AMC can utilize RTB to target similar online content channels and make sure they are hitting that audience. Entertainment advertisers typically have a date in mind – opening night, or the season premiere – and these campaigns are worthless if consumers see them two weeks later on their DVR. RTB remedies that.

CPG brands could also benefit from RTB. This is a vertical that has to account for the decline of audiences in formats like print and radio, and the slowly shrinking cable subscribers. This may be the golden age of TV, where everyone has an opinion on the big shows, but fewer young consumers are subscribing to cable. The ability to communicate a brand message has to happen online.

So what’s preventing brands from doing this right now? It primarily comes down to a lack of education. TV buying hasn’t changed in 20 years, and it’s a fairly easy process. Advertisers produce their spots, execute a buy, and the network pulls that spot and pushes it out on the agreed upon schedule (or run of network). Digital doesn’t go back 20 years, and as I said earlier, RTB barely goes back two. There’s always an educational lag, and an even greater comfort issue among buyers. TV lets brands cast a wide net, but that cost also means the message hits a lot of audience that may or may not be interested. There’s a lot of fat and very little efficiency, but it’s something that advertisers understand.

That should get easier as media mix models get more advanced. RTB providers can already access set top box data and marry digital exposures to tune-in. That way, an entertainment advertiser can see if consumers who saw a display impression had any lift on tune-in.

Marrying traditional media to RTB is going to become more commonplace in the coming year, as advertisers work harder to have multi-layered campaigns. While they might not totally understand RTB buying, they have to understand that conversations are happening digitally, through the phone, tablet, PC and smart TVs, and they have to have a presence in those arenas.

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7 comments on "The Future of TV Advertising Lies In RTB ".

1. John Grono from GAP Research
   

   commented on: January 31, 2013 at 9:24 p.m.
   * cough, cough * Really? Finite supply exceeded by demand means the future is RTB. We'll see.
2. Ross Bradley from Qeg Pty Ltd
   

   commented on: January 31, 2013 at 11:13 p.m.
   John .... The notion of a 'finite supply' that's exceeded by demand or conversely, any talk of having that infinite supply of available impressions-as against suitable audiences to target (& across all channels) becomes mute for RTB, in time. RTB will soon be about marketers finding users, as against (as, what mostly exists), users (via search), having to find products or, services. I think it's still (very much so), early days yet. Christopher points out, that..."Digital doesn’t go back 20 years and RTB barely goes back two." It's 'evolving' by the day. There's no doubt (or, should there be any), that RTB gets to become the future. I learn and write about what I'm finding, most every day. http://seekingalpha.com/user/36191/instablog
3. John Grono from GAP Research
   

   commented on: January 31, 2013 at 11:32 p.m.
   To the contrary I don't think that is a moot point regarding RTB. There will be an element of RTB (as indeed there already is in many markets). However, the broadcasters will only make available to the RTB platforms the inventory they wish to (i.e. the spots they are having trouble selling) - reducing the finite pool of biddable spots even further. Even for marquee programmes, a network will only put a proportion of the available inventory there and only when it is a bullish seller's market (i.e. it will drive costs up). From the advertiser's perspective, let's say that they just HAVE to be in Modern Family as it is the perfect fit for the brand and each week it makes the cash register ring. They don't have budget for a sponsorship, so they have to buy spot. It's now a lottery for the brand as to whether the cash register rings the following day. What brand and what media company would want such a retrogressive model?
4. Will Beamen from Big Media
   

   commented on: February 1, 2013 at 12:09 a.m.
   sorry, but if you replace the term 'RTB' with 'Digital' in this article is starts to make sense. These are weak examples of how to use this technology especially considering your title of the article. RTB is just targeting through a programatic interface....yes, we get it...less people, more tech, more efficiency, less human capital...mode of the future. However, you just tried to put RTB on the same level as TELEVISION...you may have meant to say that RTB can enhance TV but in your quest to do this you decided to tout RTB like a shiny new gadget that is the savior of the universe however you backed it up with junior varsity value propositions.
5. Tom Cunniff from Tom Cunniff
   

   commented on: February 1, 2013 at 8:26 a.m.
   In digital marketing, and especially in posts like this, the future is *always* whatever the author is selling :-) With that caveat in mind, Will Beamen is on the right track when he says "if you replace the term 'RTB' with 'Digital' in this article it starts to make sense." I would add that if we replace "TV advertising" with "video ads" this immediately makes more sense. RTB is an unstoppable force because of the continuing fragmentation of audiences. Reach remains critical, and putting Humpty Dumpty back together by hand is too expensive. It's hard to foresee a future in which video advertising is not pulled into this.
6. Ross Bradley from Qeg Pty Ltd
   

   commented on: February 1, 2013 at 9:16 a.m.
   Hi again, John Grono.... Can I put it to you this way? Q? What is Yahoo's Marissa Mayer ACTUALLY saying? ('Between Her Lines') Here: http://tiny.cc/x0ytrw Go to school on that one? It gets to soon become about advertisers - finding users (on a 'one on one' basis), IN REAL TIME.
7. John Grono from GAP Research
   

   commented on: February 1, 2013 at 10:39 p.m.
   Thanks Ross. I tried reading the link and it was pretty much mumbo jumbo of analogies. Sure advertisers want to find users and as cost-effectively as possible. That is a no-brainer. But if you look beyond that you will find tow things. 1. While 'video' will be traded via RTB online, only a small proportion of linear (first-run) broadcast spots will be offered unless this an ROI premium to the broadcaster. 2. Marketers (and I draw the distinction between them and advertisers) also want growth, and 'finding users in real time' meets the efficiency goals but not the growth goals (and clearly savvy marketers will use all tools in their armoury). Have a read of Prof. Byron Sharp's book 'How Brands Grow' and you will see ample evidence that all the 'superbrands' focus on growth rather than cost-efficiency and it's not hurt them on jot over the decades and is hardly likely to now either.

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