• by David Petersen , June 26, 2013

In 1995, automated trading transformed the New York Stock Exchange, and that same system of real-time bidding has been transforming the online display advertising industry, as ad exchanges facilitate the automated trading of digital media. It takes power and efficiency to reach the right audience with the right inventory, at the right time and place, dynamically and in real time. Now, this technical approach is gaining popularity in mobile.

Like the fast-paced New York Stock Exchange, mobile ad exchanges allow brands to bid on mobile ad impressions -- but opportunities are gone in milliseconds. The challenge becomes how marketers can bid on these ad impressions, yet assure they are reaching the right audience that will drive ROI. Some RTB platforms can empower marketers to harness the power of location and behavioral data, bid on the right impressions, and ultimately reach their ideal consumer.  Several RTB platforms say publishers already achieve higher CPMs with RTB than they do with traditional ad networks.

Just as there are risks and best practices for trading stock on the New York Stock Exchange, there's also best practices for advertisers hoping to get the most out of mobile RTB platforms.

Not all mobile ad exchanges are created equal.  If you look across exchanges, they differ in many respects, not just by publisher content or scale.  While some exchanges are operationally easier to work with than others, you risk losing critical aspects of the bidding process if you choose ease over quality. Exchanges that may be simpler, for example, may lead to less sophisticated targeting, which means your messages are not reaching the right audiences. Location quality is a critical component of mobile targeting and some exchanges have significantly higher quantity and quality location data than others. Additionally, some ad exchanges have inventory that performs better, in terms of click-through rates or secondary actions. It’s important to evaluate a variety of ad exchanges when investing in RTB, to determine what best meets your needs.

Where is the inventory you want? Probably in multiple places. Many publishers today, especially large ones, do not have exclusive relationships with a single ad network or exchange.  So, you may find inventory from any given publisher on multiple exchanges. The environment becomes overcrowded because the largerincumbent ad networks are now buying and selling much more actively on the ad exchanges. That premium inventory you want is probably available in a dozen places. This widens the marketplace for these impressions and reduces exclusivity claims made by networks.

What is premium inventory?  Maybe not what you think.  While some advertisers are interested in specific publishers, considering them "premium" based on brand awareness or some other criteria, premium inventory often does not perform as well as other sources during live campaigns.  In some cases, this is because certain sources don't promote the active engagement of the user.  Another factor is that the audience for some products, in terms of demographics and lifestyle, may not be in that premium inventory.  So, premium inventory may not result in as many clicks or secondary actions as inventory that is at lower cost, but is more targeted and capable of reaching the right audience. It’s not just about the value of the inventory – location and behavioral targeting that is accurate and powerful is critical to driving ROI through RTB.

Real-time bidding offers new levels of fine-grain control, transparency and speed of execution for mobile ad campaigns.  It also encourages an ecosystem of specialists, focusing on quality of inventory, targeting and vertical sectors that ultimately benefit both the advertiser and the publisher. Those that are taking advantage of the process now are positioned to greatly increase ROI of ad spend, just as sophisticated investors increase revenue through the Big Board at the New York Stock Exchange.