RTB Volume Doubles, CPMs Fall As Supply Outstrips Demand

The marketplace for exchange-traded media has doubled in the past quarter and has grown 184% over the past year, according to the latest findings of a quarterly tracking study of the real-time media-buying marketplace by independent trading desk Accordant Media. The “Q1 Market Pulse” report found that RTB trading increased 98% since the fourth quarter of 2012. The volume of North American media impressions transacted via RTB auctions grew 85% over the fourth quarter of 2012, and 146% over the past year.
The increased trading volume is not coming without a total for the overall digital media marketplace. While programmatic trading is expanding fast, it is also pushing average costs of buying inventory down. According to Accordant, the average CPMs (cost-per-thousand) paid through auction-based buys declined 21% over the past year, and 21% since the fourth quarter of 2012, which Accordant noted is a “seasonally strong” holiday marketing period.
The data comes on the heels of Tuesday’s release of the IAB Internet Advertising Revenue Report, which showed that the greatest expansion of online advertising revenues is coming not from so-called “premium” display advertising publishers, but from biddable media sources such as Google, Facebook, and secondary premium transacted through programmatic exchanges.
The IAB report does not release data on pricing, but the Accordant data, which also includes some non-Internet forms of RTB, such as digital out-of-home, indicates the expanding supply of exchange-based impressions is putting a damper on average costs -- at least for the time being.
“CPMs paid were at a 12-month low in January,” the Accordant report finds, noting “absorbing new volume before trending up in February and March.”
That said, Accordant predicts “several factors” are expected to “continue to firm up 2013 prices,” including an increase in the “number of programmatic buyers per auction, added focus on premium inventory, new upfront programmatic buying (non-RTB) and expanded inventory across video and mobile channels.”
In other words, demand is expected to begin catching up with supply over the next 12 months. On a positive note for the overall display advertising marketplace, the Accordant study also found that “ad placement transparency” -- or data disclosing the “viewability” of ads served to users -- improved “significantly,” growing to 41% of all impressions served during the first quarter of 2013, from only 32% in the fourth quarter of 2012.
Viewability has become a hot button for Madison Avenue and online publishers, and is quickly emerging as a best practice, if not an actual industry standard yet.



2 comments about "RTB Volume Doubles, CPMs Fall As Supply Outstrips Demand".
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  1. Eric Scheck from Cross Channel Digital, April 17, 2013 at 1:02 p.m.

    This paints a vaguely misleading picture. Not all RTB is cheap. Beyond that, a vast amount of the inventory is of poor quality, which raises brand risk. Although we count ourselves among its ardent supporters, RTB execution requires a) transparency and b) vigilance. We can absolutely account for the latter (down to the domain and interplay between other buying tactics), but clearly the industry needs work on the former. Reports like this only serve to pump headlines.

  2. S. F. from Comcast, April 17, 2013 at 11:54 p.m.

    The volume may have gone up yet the overall quality is still low and that is why advertiser is pushing viewability as a success metric - the CPM is too good to be true. And consequentially, the eCPM of RTB campaign does not necessarily lower than direct buy/guaranteed. And just one more thing to point out, RTB is not programmatic buying.

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