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There's no doubt there are still issues with programmatic advertising; fraud, poor creative, and a lack of transparency from media agencies cause much debate.
Despite this, real-time bidding (the automated auction of ad impressions) has many obvious advantages for publishers.
So, I thought I'd help programmatic newbies with a list of the benefits of RTB.
If you're still keen for more, or are a seasoned advertising professional, why not attend Creative Programmatic, our one-day conference.
1. Pricing precision
- Though successful bidders pay for ad impressions at the second-highest bid price (to provide advertiser value), publishers broadly extract greater value by using a supply-side platform (SSP) to enable RTB.
- This is due to pricing precision, with publishers able to extract value from each impression in real-time.
2. Increasing the value of remnant ad space
- As real-time auctions are triggered by the arrival of a target visitor, ad space that was previously unwanted (remnant inventory) is increased in value.
- The Econsultancy Online Publishers Report (Dec 2013) revealed that 46% of publishers surveyed had seen an increase of 1-10% in remnant inventory value. One in 10 indicated that their remnant revenue rose by over 50% as a result of RTB.
- In the same survey, only 5% of publishers reported seeing no increase in revenue.
Leftovers can taste good
3. The ability to tweak
- SSPs allow RTB campaigns to be carefully controlled with the application of business rules that specify the types of advertiser that should and shouldn't be allowed to purchase. This can be more flexible than just setting up traditional blocklists.
- Publishers can set and adjust pricing, giving greater control over their entire inventory. This can include the ability to enforce a higher price on a particular advertiser.
- Price can be controlled no matter what parts of the site impressions are served.
4. Gaining audience insight
- Publishers can see what specific segments of their audiences are best performing and most sought after by advertisers.
- This insight can be used to influence strategy, maximising the value of a publisher's audience by building stronger relationships with these high value customers and attracting new audiences that match this profile.
5. Private marketplaces maintain premium inventory
- Publishers can use private marketplaces (effectively limiting who can bid for the best ad space).
- This allows premium inventory to be sold with the transparency, controls and data protection available through RTB.
- Private marketplaces can be used as an incentive to encourage advertisers to hit a spend threshold required for exclusive access to a premium segment of inventory.
6. Improving direct sales strategy and pricing
- SSPs allow publishers a clearer picture of what they are selling, who they are selling to and what price works best for them.
- This intelligence gained from RTB campaigns can be used to inform direct sales pricing and strategy.
For debate about what's to come in RTB, see our programmatic predictions for the future).