• by P.J. Bednarski , Staff Writer @pjbtweet, April 10, 2013

Taking a deeper dive into a new Forrester Consulting research report about Real Time Bidding’s effect on online video makes for some interesting reading.

One takeaway that is a bit ironic: As online video gets more and more popular with viewers and advertisers, the necessity of RTB will become obvious. But as online video gets more and more popular, big publishers will become more and more reluctant to offer inventory via RTB.

The Forrester Research, commissioned by SpotXChange, was tipped by MediaPost’s Gavin O’Malley a few days ago.  The big headline was that RTB will account for almost one out of every four dollars spent on online video advertising by 2014.  That’s awesome.

The report points out: “Online video is hot, making it RTB’s own worst enemy because premium publishers that sell direct believe that they need to manage their inventory themselves to  sustain the high CPMs they enjoy. RTB is generally associated with tier-two and -three inventory at  lower  eCPMs, giving premium publishers little incentive to participate. Furthermore, premium content owners have been slow to open up to the idea to sell through indirect channels. However, as RTB becomes defined more by the programmatic buying process rather than the pricing model, publishers will enter the fray to reduce friction in   the transaction process.”

And along those same lines: “Premium publishers still withhold inventory with claims of sold-out status. Even as the quantity of premium content increases, premium publishers of video content remain hesitant to use automated platforms to sell their inventory in a public environment, due to the high eCPMs they are able to sustain for the moment. Those that have tested automated platforms are doing so primarily in private marketplaces, where they are able to test the impact on pricing, fill rate, and targeting on a limited and controlled basis.”

So there’s the conundrum. Online video is plentiful so publishers don’t want to offer it in an RTB environment. But as online’s popularity grows, publishers will have to figure it out: There’s too much to take care of.

The conclusion, Forrester says, goes like this: “[P] ublishers are caught up in the idea that technology-driven sales will lead to less pricing power and diminished eCPMs. Publishers need to keep their eyes on management tools that allow them to set price floors, choose advertisers directly, and get detailed insight into the types of inventory that are in demand. As they test private marketplaces to improve sell-through rates on these spikes in traffic, they can test the boundaries of the pricing of their content without the risks of putting it on a public exchange.

 And ad agencies have to come to grips with the fact buyers don’t get how the digital ad space works.

Forrester says, “What these buyers need to learn from their peers on the trading desks is that transparent inventory, priced high, holds the same value as inventory priced similarly in a direct deal, or possibly more. While bid-based models may lead to decreased eCPMs on broad-based campaigns, they may wind up driving up the price on high-quality, relevant, and in-demand content.”

All right now get to work.

 pj@mediapost.com