Getting real about RTB

Getting real about RTB
SHARE
THIS



There’s nothing new about bidding for advertising spots. Before the Internet, even traditional media that sold on ratecard would issue heavy discounts if there was excess inventory, and the sales team would be out to find the buyer prepared to pay the most. This lengthy process started early; in TV-land that often meant major brands or agencies buying up time months in advance. It wasn’t a perfect system, but the concept of getting the best price for a limited commodity has always been the aim.

Google changed the scene in the last decade introducing AdWords. Now small businesses could buy advertising based on keywords, and their exposure was based on how much they were prepared to pay. The price was determined by demand and the number of participants vying for the limited inventory could change by the hour. Advertisers were bidding but, unless they watched over their campaigns and resubmitted their bids every hour, it wasn’t real-time.

Of course Google is only a slice of the vast pool of available online inventory, each offering a myriad of ways to reach prospects. Ad exchanges emerged to amalgamate data and enable consolidated targeted buying across multiple sites. Late last decade demand side platforms sprang up, providing the means for buyers to work across multiple exchanges using the same targeting criteria.

Real time bidding (RTB) was the natural progression. Just as Google had done years before, the best advertising spots could be offered to the highest bidder, at that precise moment in time. Algorithms were built to help planners determine which items to bid the most for, based on the objectives of the campaign and the supporting data provided by the exchanges.

It’s been a runaway success. RTB accounted for 68 percent of the spend on Google’s Double Click Ad Exchange in May last year, from just 8 percent in January 2010. That’s a meteoric rise, but the impetus has largely been confined to display advertising. Forrester reckons RTB for video advertising will happen, but not overnight. Their forecasts suggest that RTB will account for 30 percent of all online video spend in the US next year.

Australia is still a little way behind the US, even though some organisations might claim otherwise. In truth there are a few smoke and mirror tactics being used, giving the impression that bidding is happening in real-time, when it’s not. What’s often happening is that networks are buying up a slice of inventory and selling it on to their clients – not real time and tying inventory to a slice of the potential universe of buying. Such practises distort the advantages of RTB, but probably make advertisers feel like they are getting the best deal.

So, what’s stopping us having more genuine real-time bidding. I believe there are two main reasons. First, there’s a lack of video inventory. Slower speeds and usage limits mean we download a fraction of the content of our US counterparts. Australia is rolling out faster broadband – potentially the fastest in the world – but the speed of the rollout is slowing us down.

Secondly, there’s a lack of trust. Publishers are concerned that RTB will hit their yields. It’s not the case, of course. Sales teams can still develop premium campaigns using their prime inventory, with RTB helping to monetize what’s left. Real time bidding will ensure the maximum price for those placements that were previously unsold, undercharged or thrown-in free because it was too hard to do anything else.

This second point calls for greater education of the benefits of RTB for advertisers, publishers and agencies. Publishers need to realise that it’s an opportunity to improve revenue. Agencies need to understand that creative planning is still required, so their role is still vital. Advertisers will be easily swayed once they see the figures that show how effectively RTB can improve their reach and frequency.

Publishers also need to address the first point – the need for more online video. Consumers demand it, it generates revenue and with the rise in the demand for connected TVs (something Australians have been quick to adopt) the opportunity is there for the taking.

Phil Duffield is the managing director of Adap.tv.

Please login with linkedin to comment

Latest News

How To Create Connections To Increase Your Influence
  • Opinion

How To Create Connections To Increase Your Influence

Darren Fleming (pictured below) is a speaker, author and trainer who specialises in helping leaders influence their teams. He is the author of Don’t be a D!ck – creating connections that make influence happen. In this guest post, Fleming offers proven tips on how to improve staff connections and your influence around any office… The secret to […]

Opinion

by B&T Magazine

B&T Magazine
PayPal Unveils “Uncle Awesome” In Witty Christmas Spot Via Buzzman
  • Advertising
  • Campaigns

PayPal Unveils “Uncle Awesome” In Witty Christmas Spot Via Buzzman

A dodgy uncle is the star of PayPal’s new Christmas spot set to air across 15 european countries this festive season. The work of famed Parisian agency Buzzman, the ad plays on the traditional family Christmas and the arrival of an uncle notorious for his over-touching, cheating and over-eating. This time around, thanks to Paypal, Mr […]

Isentia Builds Out Executive Team With Three New Appointments
  • Media

Isentia Builds Out Executive Team With Three New Appointments

Isentia Group Limited has announced three senior appointments to its executive leadership team to accelerate product enhancement, operational efficiencies and support ongoing transformation. Following an extensive search, Paul Russell has been appointed chief technology officer (CTO), Kelly Young chief human resources officer (CHRO) and Peter McClelland chief financial officer (CFO). Ed Harrison, Isentia chief executive officer and managing director, […]

Ovarian Cancer Australia Says ‘It’s Time For Ovary-Action’
  • Campaigns
  • Media

Ovarian Cancer Australia Says ‘It’s Time For Ovary-Action’

Ovarian Cancer Australia has launched its first pieces of work via agency 10 feet tall. ‘It’s time for ovary-action’ is their empowering, new creative platform that aims to rally all Australians to stand up and take action for the cause. The launch includes a quirky content video accompanied by print and radio components that aim […]

Assembly Label Appoints The Wired Agency
  • Media

Assembly Label Appoints The Wired Agency

One of Australia’s leading fashion brands, Assembly Label has officially appointed The Wired Agency as its exclusive digital campaign partner. As a market leader in the ‘simplified essentials’ space; quickly becoming renowned for their minimal approach to design and clothing construction, Assembly Label has recently opened their tenth retail location as well as being well-represented […]