Right now, marketers are combing through more data than they know what to do with, on top of being tasked with reaching consumers through more digital channels than ever before. With so many options and the influx of new technology, it’s no surprise that automated methodologies are in such high demand.
Many advertisers are buying media and targeting consumers via real-time exchanges, while increasingly both premium and non-premium publishers have made their inventory available in the real-time marketplace. RTB is maturing and evolving away from being only a way to automatically bid on cheap inventory, to one comprised of credible inventory, quality audiences, multiple channels and sequential messaging. It’s now also considered a strategic part of an advertiser’s marketing campaign, aimed at enabling better connections with consumers across multiple channels through improved ad targeting and relevance in a cost-effective, efficient way. Challenges aside, RTB has proven to be an effective digital advertising method, ripe with vast potential.
The growth of site retargeting and CRM data pools has undoubtedly fueled the rise of RTB. The vast quantities of customer data companies
use for retargeting purposes provides a much richer and deeper seam for us to mine than anyone could have imagined five years ago.
Herein lies a data power struggle: most customer data resides within the client-side. Companies like Criteo and AdRoll — both of which specialize in site retargeting — have had more success selling retargeting data directly to clients than to agencies, leaving agencies somewhat in the dark in the world of owned data. Google is another company that has reaped enormous success by circumventing agencies. So what does this all mean for RTB? Will client-direct be the go-to media buying strategy, or will the traditional process in which most companies rely on agency expertise reign supreme?
The nature of today’s data is driving a massive shift. Take a retailer, any retailer: Best Buy, Home Depot, Macy’s, whichever. All are incredibly sophisticated in their customer data practices. The age-old direct-response tradition of sending customers catalogues and mailings has morphed into the current e-commerce world. Within e-commerce, massive amounts of data about purchase behavior is tracked, combined with inventory data, and analyzed by retailers and brands alike. Traditionally, this has not been the area of expertise for ad agencies. However, agencies are now armed with an assortment of tools capable of using data to manage client’s campaigns.
Now there’s a visible war between three different types of agency groups battling for client dollars: search agencies, who claim to understand big data and are therefore best equipped to manage RTB; trading desks, founded solely to manage RTB campaigns, but that tend to lack pricing transparency compared to traditional and search agencies; and finally, traditional agency groups struggling to get brand dollars flowing through their internal trading desks.
So what’s going to happen? I certainly think that the three-way competition within an agency is healthy. Clients want different things. Some want transparency (go with a search agency), others want deeply integrated campaigns (go with a traditional agency) and others want RTB experts to execute on what the client is prepared to pay for (go with a trading desk). Although the intra-agency competition is good for clients, many will find it creates roadblocks to integrating e-commerce systems and in-house customer databases, and will opt to manage it themselves – even to the extent of using a proprietary DSP and/or DMP. This is the real threat for agencies.
RTB is never going to be like TV buying, where you'll be fleeced if you're not an expert. It’s going to look more and more like the kinds of big data systems that CMOs are being forced to learn and love. Agencies are already evolving to meet the challenge – but will they keep up?