Over the past year or two programmatic buying and real-time bidding have become the new cornerstones of online media buying.
Traditional media negotiations, RFPs, and opaque ad networks have been replaced with a more efficient, more effective and more transparent media buying model.
Without the wastage of bulk buys and the time-consuming nature of negotiating directly with individual website publishers, advertisers and publishers alike are getting a better deal.
Indeed, according to eMarketer, more than a quarter of all display-ad spending in the U.S. will occur via real-time auctions by 2016. Spending is predicted to increase from US$1.9bn in 2012 to more than US$7bn to make up 28% of total display-ad buying by the end of that year. eMarketer suggested that there are four key factors that will drive this growth:
1. The maturation of the Facebook Exchange;
2. An expected influx of video and mobile inventory;
3. An anticipated greater availability of premium ad inventory; and
4. An overarching demand for better transparency for all of digital display, not just RTB.
Before the advent of the real-time bidding the majority of digital media buys were transacted with ad networks and publishers and provided little in the way of transparency into the actual buy. Now, marketers are now able to evaluate each impression against their goals before purchasing.
Greater transparency allows for greater analysis and optimisation to drive improvement. Programmatic buying allows you to buy at true market rates for each individual impression.
With the availability of high quality inventory from nationally recognised publishers in addition to the Facebook Exchange, along with powerful tools to ensure only appropriate sites are chosen to display the ads, real-time bidding is now delivering more efficiency, less waste and better results through more precise targeting.
Indeed Kellogg’s now places more than half of their online media through programmatic channels. Last year Bob Arnold, Associate Director of Digital Strategy at Kellogg’s told Forbes, “We’ve seen tremendous results when using programmatic buying. Depending on the brand, the digital media ROIs have increased as much as six times.”
Behavioural targeting data
Rather than selecting specific website ad placements, you can hook into behavioural targeting data collected from cookies and data exchanges to identify audience segments. Rather than defining narrow fixed site lists you can set up campaigns to test a wide variety of brand-safe sites, and then optimize to deliver on the best performing sites in the test group.
You can leverage targeting data to define the type of person you want for the ad impressions using your predefined targeting criteria and budget, and serve the ads accordingly. In terms of effectiveness, you target the right consumers at the right time.
New role on TV
Interesting, it’s in the lounge room that real-time bidding now holds more promise, even if it is still some way off. While TV remains the channel of choice for brand building, the growth of smart TVs, video on demand, and time shifting, have of course changed television viewing habits dramatically.
Overall the number of consumers who are exposed to TV ads is shrinking. As more media becomes digitised and more television is watched over the internet, programmatic buying for television will become more mainstream.
Allowing advertisers to bid on spots, using audience and show-performance data crunched in real time to target a mass TV audience individually is such an attractive proposition. Real-time bidding has the potential to revolutionise the way brands buy television advertising.
Simon Van Wyk is founder of HotHouse