Four Real-Time Questions about Real-Time Bidding

Since real-time bidding (RTB) had its big break a few years ago, inventory sources, audience data and creative opportunities have all expanded. This evolution has continued into 2013 with the rise of the Facebook Exchange (FBX), discussions around private exchanges, and healthy projections that point to 59% growth in RTB spend by 2016.

Here are four of the most pressing questions facing RTB today:

1.    How will RTB continue to grow over time? What are the contributing factors to growth?

In time, very few buys will be contracted the "old fashioned" way.  Even custom or native advertising will be booked through an exchange – maybe a private exchange. In addition, ads will be delivered through an exchange platform, even if the buy entails 100% share of voice. Why? For starters, RTB brings scale and efficiency to the table. It’s easier, cheaper, takes fewer people, and is more reliable than current methods. And then, there’s data. Whether it is good old fashioned reach and frequency, or if it's more elaborate modeling or customer data, you want to control those aspects across your entire buy and by running ads across the exchange that is exactly what you get. Last but certainly not least, the wide adoption of site and search retargeting over the last few years has also become a huge contributing factor in RTB growth. In fact, I would consider almost all forms of audience buying including behavioral advertising to fall under the category of “retargeting.”



    Are more branding dollars really moving into RTB territory, and why?

To the extent that branding dollars are entering the digital space, they are flowing to RTB. While TV is still a much larger platform for brand advertisers, digital is the largest growing form of brand advertising -- and it's fueled by data and video.  Simply put, brand dollars will follow audiences.  And digital dollars are moving to RTB because it provides a place where advertisers can experiment with data, test different strategies, gain audience insights, and see what works best for their campaigns. 

3.    What does FBX mean for the future of biddable media?

FBX is a big deal because it's different and yet it's the same. All ad exchanges in the world are diverse groups of inventory brought together by the exchange. But Facebook is so huge that it can have its own private exchange where you can bid on their inventory. One huge benefit for advertisers is the security of knowing exactly where their ad is going to run: it will run on Facebook! But if we fast forward a few years, when all digital media will be made available via exchanges, FBX will be just another player in the marketplace. FBX is a great example of how retargeting and RTB go hand in hand.

4.    Are private exchanges really beneficial for buyers and sellers?

Yes, they absolutely are.  Private exchanges are awesome because both the buyer and the seller know who they are working with.  This old fashioned notion is still important in today’s “real-time” world. If you are a seller, you might not want your inventory available to anyone and everyone.  If everyone had access to their inventory, it would take some of the shine or "exclusive" nature out of the media sell.  This is especially true if you sell a lot of native/custom advertising.   And if you are a buyer, then a direct relationship enables you to be sure of where your ads are going to run.

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