Commentary

The Bottom Isn't The Finish Line For RTB

"Your remnant inventory is so remnant, you have to trade it via real-time bidding."

"RTB? More like Race To The Bottom, amiright?"

Or something like that. I'm just trying to get all my RTB-being-deciphered-as-race to-the-bottom jokes out before it's no longer hip, because I just found out the bottom isn't the finish line. It's more like the first turn in a long race.

Before we go any further, let's start from the top.

New estimates this morning say that programmatic media-buying will account for more than half (53%) of all online display ad buys in the U.S. in 2013. The estimates include real-time bidding (RTB) and other, non-auction-based deals that use technology to automate parts of the trading process.

The projections come from Magna Global, a unit of Interpublic's Mediabrands. On the surface, it appears Magna doubled their programmatic media-buying estimates. After all, their new projection for 2013 of $7.4 billion is a whopping $4 billion more than their initial 2013 estimates, which came out in August 2012.

However, the old projections did not include non-auction-based deals. This is where the distinction between "RTB" (auction-based) and "programmatic" needs to be understood.

Programmatic is the umbrella term for any automation of media trading, and RTB falls under that cover. So while all RTB-based trades are programatic, not all programmatic trades are RTB.

(Not to make things even more confusing, but apparently not all programmatic trades are programmatic in Magna's eyes, as PPC search wasn't included in the estimates. The reason? According to Vincent Letang, EVP, director of global forecasting for Magna Global, it's because "100% of search has been 'programmatic' from birth.")

Back to the projections.

Magna's initial 2013 estimates had RTB-based trades pegged at $3.4 billion. With the end of 2013 on the horizon, they've bumped that estimate to $3.9 billion, which would be 28% of "display-related" transactions. The report considers banners, social and video — on desktop or mobile devices — to be display-related.

By 2017, Magna projects RTB-based trades will alone account for 52% of the market. But in order for over 50% of display impressions to be auctioned off, wouldn't that mean RTB would have to shake the "remnant-only" stigma?

"We do think it will gradually expand to mid-term, possibly premium-tier," Vincent Letang, EVP, director of global forecasting for Magna Global, tells RTM Daily. "The only thing we imagine remaining outside of [RTB] is high-though, high-value ads, such as home-page takeovers [or] other things that are very expensive where everyone wants to maintain a traditional direct relationship.

"But apart from that, we think that, gradually, every tier will be exposed to [RTB]," he says. "Maybe not top premium inventory, but it will gradually go up the food chain to encompass more."

So why does this matter? Because we've had it wrong all along, apparently. It was never a race to the bottom, it's a race from the bottom.

Next story loading loading..