Last week, we released a new Real Time Bidding (RTB) Buyer's Guide and an infographic on the RTB ecosystem. Though only a small percentage of marketers take advantage of this area of marketing, those who do are finding it to be one of the most efficient ways to reach customers across multiple touch points through a single campaign.
As there is still some confusion around this area, we reached out to four marketers deeply entrenched in RTB to find out what they think of it, the advantage of making it part of your spend and how it will affect the future of marketing.
1) What are the most significant benefits of real-time bidding? How important are data management platforms to this?
Ari Paparo, SVP Product Management, AppNexus
Real Time Bidding allows buyers to access the media they want based on their own data, and theoretically with little waste. Data is a key part to this, and currently a large portion of RTB spend is based around strategies utilizing data.
The term "DMP" or "Data management platform" means different things to different people, so it can be hard to generalize. It is certainly the case that buyers need to be smarter about the way they collect and analyze data in the RTB environment, and there are lots of great tools out there to do that.
Paul Cimino, CEO, Brilig
RTB allows markers to apply data algorithmically. This is similar in nature to SEM, except it can be much more brand/campaign specific. Audience algo RTB (ARTB J) will perform much better (higher spend ROI) than plain old media-based RTB. We should expect targeted RTB direct response to get similar response rates to direct mail (1.4% engagement). DMPs are currently just a fancy name for cookie data warehousing but they will become the nurseries of these brand algos.
Jerry Sandoval, SVP, LiveIntent
The main benefit of RTB is the ability to learn, optimize, and change a campaign instantaneously. Rather than purchasing a campaign directly from a publisher or network using a huge bulk budget and wide targeting parameters, RTB allows a buyer to pick and choose impressions as they come in.
A purchaser can allocate budget as the campaign progresses to the best performers and not wait until a campaign ends to get actionable learnings. DMPs can enhance the RTB experience by bringing in additional sources of targeting and optimization. A DMP can help manage performance across all segments purchased, target first-party data, and assist the buyer through their optimized and manual purchases.
Jeremy Kagan, CEO, Pricing Engine
RTB allows advertisers to buy audiences rather than simply inventory. It also allows realistic price discovery on a more granular level instead of a more broad based average pricing as seen in the traditional CPM model - a sort of summary of audience quality. Rather, each impression is bought individually.
This forces a focus on performance rather than the brand of the publisher - which can reward publishers with high quality, responsive audiences, but penalize those with large but indifferent audiences. Data is the key as without accurate and timely information. rules based bidding isn't possible. (This means not just audience data - without accurate performance data downstream, advertisers won't be able to bid effectively.
2) How will the competitive landscape for the RTB market evolve over the next few months?
RTB originally started in the easiest environment to test – remnant display inventory. No one had a good way to sell or buy it in bulk, so RTB made the process easier. The next step is to make top tier, premium inventory available in real time, as well as expand outside of display to mobile, email, video and more.
Bringing data and optimization into all buys will let advertisers achieve better performance, and therefore spend more ad budget through this channel. Consolidation between DSPs, DMPs, SSPs will make everything more efficient for all players.
I think the longer term trend is one of better and more transparent integration of disparate data sources and pricing algorithms to allow for better and more accurate use of the platforms that have been developed. Some of the markets in inventory and accompanying data have been built with almost astonishing capabilities; now the supporting technologies will have to catch up.
Over the next few months 3 factors will drive RTB awareness and growth – Facebook Exchange, the election and the holidays could be the perfect RTB storm. RTB is approximately 20% of display and is forecasted to consume 1/3 of display dollars by 2015. These number are low as they do not take the big data revolution and multichannel RTB into account.
3) How can you use real time bidding to reach consumers across multiple channels via a single campaign?
You can execute a cross-media display, rich media, video, and Facebook campaign right now using RTB. However, RTB remains nascent in the mobile arena, and the supply of available RTB video, especially in Europe, remains small. There's a great deal of interest and innovation taking place and cross-media access should become more exciting over the coming 12-24 months.
Many RTB platforms have capabilities to extend buys across channels. This way, advertisers can easily set targeting parameters and monitor frequency controls across display, mobile, email, video, etc, all through one campaign.
4) Display still accounts for the bulk of RTB dollars. Do you see this spend moving toward other channels? How can marketers get the buy in to do so?
RTB budget will continue increasing from all channels. The push to mobile, email, and video will increase as the technology develops and more and more people spend the majority of their time away from their desktops.
Tablets, phones with larger screens, and even digital out of home will gain more traction to get users on all screens, in all states of mind, and anywhere they go. Reporting showing proof of awareness and interaction are key for other channels to take a larger percent of ad dollars.
RTB TV is coming. Early RTB TV markets will be owned and operated by the cable companies but Google, Apple and others will ship IP enabled cable cards inside TVs and possibly break the cable oligopoly.
I think much of the growth in inventory in RTB has been driven by the large amounts available in the display channel - there's just a ton of large sites, and networks, and sell through rates for direct sales are never 100%. RTB has allowed the remaining unsold inventory to be monetized in a market driven way.
With huge amounts of social media sites having similar characteristics - large inventory and low sell through - it's easy to imagine that this gets driven in the same way. However, I don't think marketers will need buy-in to use the inventory as it will likely be part of the same rules driven buying process.
Each channel of media has its own rewards and challenges in a real-time environment. In mobile, for example, most of the data infrastructure utilized by RTB is infeasible. This doesn't mean the opportunity doesn't exist, but that very different techniques need to be brought to bear in order to generate results. This is where a lot of opportunity lives.