It's A Fickle Thing, This RTB Stuff
When recent data came out saying that negative news cycles decrease competition in exchange-based marketplaces, my first thought was that automation, despite all its coolness, does not yet reign supreme. People tout its abilities, but in the end humans still make the call, such as not advertising when negative real world events are happening.
"The humans are still proving to be valuable in this automated world," Andrew Casale, vice president of strategy at Casale Media, said. "Hopefully they will continue to be."
That's one example of how perception — or at least hype — might not be reality.
But I think that the bigger point is hidden in the second part of Casale's statement. He can only hope humans will continue to be valuable in the automated world. Of course humans will always matter, but nobody really knows how much. The market doesn't have standards or precedents. Should everything be automated? What's the best way to do programmatic? People are fickle about things as they feel it out.
The data showing the impact real world news has in the programmatic world came from Casale Media's latest Index Quarterly Report. The same report has some other data that shows how quickly things can change in the exchange-based marketplace.
For one, there were serious differences between the number of demand-side platforms (DSPs) advertisers used in Q1 vs. Q2 in 2013. Additionally, which advertisers were spending on RTB campaigns and how much they were spending changed drastically.
In the first quarter, 78% of the market's money went through just five DSPs, with the most used DSP alone seeing 35% of the money. In Q2, the most used DSP's share dropped to 21% and the top five's collective share fell to (a still high) 70%.
AT&T was the highest spending brand in both Q1 and Q2 in the programmatic world, and in Q1 they spent a lot more than anyone else. For every dollar AT&T spent on exchanges in Q1, GM, the second highest spending brand that quarter, dished out just 17 cents. Verizon, the 10th highest spending brand in Q1, spent just $0.08 to every dollar AT&T spent.
However, the range of spending was much closer in Q2 — as were the spenders. Chrysler, the 10th highest spender in Q2, spent $0.41 to AT&T's dollar. Priceline was the second highest spender in Q2 after not even being in the top 10 in Q1.
Casale rhetorically asked: "Is Q2 a strong quarter for travel, or did Priceline just put a lot of money into programmatic [then]?" He admitted he can only speculate as to why things like that are happening.
I asked Casale if he thought it was fair to call the RTB marketplace "fickle."
"My counter to that would be…that the market is growing pretty fast. Consistent trends
quarter-over-quarter are going to be hard to [continue] because we are dealing with different demand each quarter," he said. "The other thing I would say is that advertising in general is cyclical.
The comparison shouldn't be Q4 to Q1. We should be looking at last Q4 to this Q4."
Of course, Casale is right in calling advertising cyclical. Seasonality and real world events have always had a huge impact on it.
But the classic H and five Ws — who, what, where, when, why, and how — are still changing in the RTB world, as are people's loyalties and investments.