How RTB Video Exchanges Come Up Short

I read the recent post on real-time bidding video exchanges with both fear and sadness. Fear that some might take the market view to heart, hurting both advertisers and publishers at once. And sadness, because the near-limitless potential of digital video advertising was given short shrift.

To set context and understand an alternate perspective in which video advertising is the cornerstone of the dawn of the digital branding era, consider that the estimated $450 billion global advertising spend is roughly split between direct response advertising, which captures $90 billion, and brand advertising which captures four times that, at $360 billion. [Magna Global, Strategy Analytics research]

Digital marketing and advertising has reinvented the entire direct-response industry and is poised to capture the entire $90 billion spend. With Google at the core, myriad companies turn clicks into dollars and successfully answer the questions: How do I buy?” and “Where do I buy?” Bottom of the funnel, conversion optimized, performance-based media and a fantastic business, tailor-made for the machine-based real-time buying exchanges like the one described in the RTB piece.



But what of that gigantic other market -- the $360 billion brand advertising market that hits consumers with desires that dare compel them to consider what to buy? This market is dominated by TV, because marketers can convert sight, sound and motion into real wants and desires. Video, unlike any other medium, has the power to impact desire. Brand advertising correctly assumes humans are not just rational automatons or cookie data points, but real people with real aspirations.  That’s the market digital video has the potential to transform. 

It’s hard to enumerate all the ways in which smashing together ad infrastructure and data and analytics built to service direct response in an RTB, and claiming it represents a victory for digital video advertising, falls short of the real opportunity. Consider the highlights:      

  • While promising a “new paradigm” of audience targeting, what RTBs really do is repurpose well-worn and very often flawed third-party direct response cookie tracking. At best, these cookie pools tell you age, gender, geo and some clickstream data --and they don’t even do this very well. If the data is correct -- and it’s increasingly ambiguous -- you learn nothing about brand receptivity or performance, ad exposure or ad load. Nothing about what matters most: Are people really paying attention?
  • RTBs are transaction brokers, nothing more -- designed to create distance between publishers and consumers. The more complexity built into the transaction, the more valuable their brokering is. But this depreciates publishers' potential to build an understanding of how their audience performs against brand objectives such as recall and favorability, within that constant flux of a variety of variables. Without that knowledge, publishers learn little and advertisers ultimately get less sophisticated planning and less efficient brand buying.
  • RTBs are unpredictable and ill-equipped to handle TV-sized brand campaigns. Is a brand media planner going to wait to dump $30 million into an RTB with no ways to predict or report on placement, brand lift, brand receptivity, competitive ad load, category ad exposure, etc.? Show me a brand media planner who only cares about CTR, and I’ll show you a future former brand media planner.    

Video deserves better, and the digital branding era is ripe for purpose-built video brand advertising solutions that:

1)   Use data to find brand receptive audiences at scale.

2)   Help publishers understand how to optimize their inventory to deliver brand receptivity, thus elevating the value of their inventory.

3)   Build multiscreen distribution and reporting that help advance planning and brand result reporting in dual and triple exposure instances.

4)   Create a “full-stack” video brand advertising solution that keeps the audience, publisher, data and campaign integrated so real-time, in-campaign optimization responds to brand results, not just pricing and distribution.

Understanding how digital video can transform brand advertising requires fresh thinking about what it means to deliver effectively for all parties in brand relationships: consumer, advertiser and publisher, rather than the cynical arbitrage of old cookie and pricing data the video RTBs would have you buy.

2 comments about "How RTB Video Exchanges Come Up Short".
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  1. Philip Moore from Philip Moore, August 14, 2012 at 5:11 p.m.

    Brand advertising of $360B is shorthand for decisions based on ego and emotion. It's only called a "brand" buy because there are no reliable metrics.

    If video with sight, sound, and motion has the opportunity to create real demand for a product or service, then why let the ad "off the hook" by not measuring its ability to generate a conversion?

    RTB - real time bidding can increase the bid on ad placements that work and decrease the bid on placements that don't work to the point where cost per acquisition is optimized. Video ads that generate consumer desire placed in venues that compel an action (sale, signup, whatever) are worth more than ads that don't generate desire or are displayed in content that does not compel an action. If it's worth less, why shouldn't I be able to pay less? If RTB can do the conversion analysis in real time and adjust the bid accordingly, then I win - and the other marketing manager for the product with a better ad or for whom the venue is more appropriate also wins because I'm not there bidding against her. The only "loser" is the venue/video producer who was collecting "premium" rates from an advertiser (me) who wasn't getting premium results.

  2. James Collier from YuMe, August 21, 2012 at 6:32 a.m.

    I think you're selling a large number of very savvy marketing exec's short Philip- would they continue to invest in TV if it didn't work? Would they keep their jobs?

    Firstly, the reality is that purchasing an ad during the final of American Idol will generate a spike in brand activity and sales that you are unlikely to see in a digital campaign- if you can even manage to achieve the scale.

    Secondly, you're missing the point entirely; the ability to see brand elevation cannot be merely quantified by acquisition. What you're talking about is performance marketing. Brand metrics require a greater understanding of both the consumer and their environment.

    No one is talking about letting anyone 'off the hook', what's being posted here is a solution to create an environment within online and emerging platforms that provides safe, scalable and quantifiable brand-building opportunities.

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