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The market for real-time bidding (RTB) may be a nascent one, but many experts believe RTB will have a significant impact on the ways marketers buy media and the ecosystem of companies in the space is growing rapidly as evidenced by our new Real Time Bidding (RTB) Buyer's Guide.

Although much of the RTB action has been in the display market thus far, the amount of RTB video inventory available is growing too and is expected to account for nearly a quarter (22%) of online video spend in 2013.

Not everybody believes this will be a boon for media buyers, however. Jayant Kadambi, the founder and CEO of online video ad network YuMe, is skeptical and in a Online Video Insider guest blog post entitled How RTB Video Exchanges Come Up Short, he explains:

While promising a “new paradigm” of audience targeting, what RTBs really do is repurpose well-worn and very often flawed third-party direct response cookie tracking. At best, these cookie pools tell you age, gender, geo and some clickstream data --and they don’t even do this very well. If the data is correct -- and it’s increasingly ambiguous -- you learn nothing about brand receptivity or performance, ad exposure or ad load. Nothing about what matters most: Are people really paying attention.

Kadambi also questions whether RTBs can scale and whether they serve the interests of media buyers. On the latter point, Kadambi writes that "RTBs are unpredictable and ill-equipped to handle TV-sized brand campaigns." On the former point, he argues that RTB exchanges are "nothing more" than middlemen who hurt the efforts of brands to connect directly with consumers.

"Video deserves better" he says, and he concludes by suggesting that brands truly interested in using digital video to their advantage need to look beyond the "cynical arbitrage of old cookie and pricing data the video RTBs would have you buy."

Obviously, as the CEO of a video ad network, Kadambi has a horse in the race and that should be taken into consideration when evaluating his comments. But is there any truth to what he's saying?

If RTBs can continue to significantly grow the amount of premium video inventory they have -- and that may be a real if -- there are certainly areas for concern. Kadambi correctly points out that there's more to campaigns that just "pricing and distribution," and media buyers looking at digital video as a television-like medium may indeed discover that they're not able to get the insight they need. There are also smaller if yet still-fundamental concerns. Brand safety, for instance, may be a bigger issue with video than display for some brands.

None of this, however, means that there isn't a place for RTBs in the video market. RTB will be making its presence felt to varying degrees in most if not all digital channels -- video included -- over the coming years and for media buyers, ad players and publishers alike, getting ahead of the curve is probably the best strategy like RTBs or not.

Patricio Robles

Published 16 August, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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David

A "cynical arbitrage?" To be frank, that sounds more like the old model of bundling sites together at a significant markup than the real-time video ad buying I know, which has transparent pricing and lets marketers control exact sites sites their ads run on at all times along with every other aspect of a buy -- all based on real-time performance and brand lift data.

about 4 years ago

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