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Though real time bidding (RTB) has been around for a few years now, it has so far failed to revolutionise the industry as predicted when it first emerged.

Statistics vary, but overall RTB made up about 10% of the overall UK display advertising in 2011.

While this is predicted to grow rapidly during 2012, there is a feeling that ad exchanges still need to convince marketers of the benefits of investing in RTB.

On the face of it, the positives are obvious: it allows advertisers to set the price they are willing to pay to target specific users.

Which, in theory, results in better ROI. However, critics of RTB suggest that it can be too complicated, results in inflated prices and is really just a way for publishers to sell off unwanted ad space.

To find out more about how RTB works I spoke to Sue Hunt, EMEA Director for Yahoo’s Right Media Exchange.

RTB seems like a great deal for advertisers and publishers. Why is the industry still fairly small?

It currently represents a small percentage of overall online EU ad spend, but the uptake in the US over the last couple of years is a good indication of what we can expect in 2012 and beyond.

The expected growth in RTB spend this year in Europe is likely to follow the same trend as in the US last year – 140 to 150% growth year on year.

Publishers have long worked with platforms (exchanges or SSPs) or networks to improve their revenue, and we are seeing the large agency and independent trading desks really gathering momentum now too.

What impact does RTB have on CPMs?

To date, there is no obvious trend in CPMs. There is a misconception that RTB reduces yields, but in reality, we can see buyers prepared to pay higher CPMs if RTB allows them to access a niche audience more efficiently.

Do the strengths of RTB buying mean that it works better for a certain type of advertiser? e.g. SMEs?

We see a range of advertisers using the ad exchange and trading via RTB.

The principle objective is efficiently reaching their audience and demonstrating enhanced performance – whether that be by views, engagement, conversion or click.

One of the benefits of RTB is that it can give more immediate analytics. But how easy is it forhttp://creativecommons.org/weblog/entry/26283 advertisers to make use of the data? Do they need in-house experts?

To fully maximise the wealth of data available and apply the learning’s and optimisation, we are seeing many of our partners employing analysts and data specialists.

Platform trading is changing the shape of digital media recruitment such that a mathematical background is becoming highly sought after.

One of the criticisms of RTB is that it is used to sell off unwanted ad space. How would you respond to that?

We look at advertising space as guaranteed – sold directly by the networks and media owners themselves – and non-guaranteed – sold via an ad exchange or platform.

RTB is just one buying method that we can offer as an ad exchange.

We are not seeing a change in the inventory that is offered to RTB buyers as publishers appreciate the additional demand, budgets and advertisers that are buying, protected by the publisher controls that we provide.

Similarly it has been said that advertisers steer clear of RTB as they want to exert more control over exactly when and where their ads are seen. How can you overcome this issue?

Yahoo’s Right Media Exchange has invested heavily in the controls we give our partners.

Sellers can control the transparency and floor pricing of their inventory and the advertisers and creatives they want to accept.

Buyers can positively target by category or even to URL. They can also utilise block lists to ensure they do not appear against a given website or category.

Premium publishers may be able to earn more from their inventory by setting up private exchanges for select advertisers. How can you convince them of the benefits of using an open exchange?

Right Media is by definition a private exchange.

All of our customers have complete control as to who they trade with, and whether they want to be public on the exchange to openly attract trading partners, or hidden so that only themselves or our service teams can introduce them to the full exchange.

One of the key benefits of RTB is being able to target specific users. How will this be affected by the new EU cookie law?

All of our targeting capabilities are anonymised and our policies compliant fully with EU law and we offer users the controls to opt out of interest based advertising if they choose.

How does RTB work on mobile? Has it proved to be popular with advertisers?

As we release new mobile targeting capabilities this month – giving us the ability to target devices (smartphones and tablets), browser, operating system, connection and carrier – we expect to see an increase in demand for mobile advertising.

We already have many supply partners keen to trade mobile inventory through the Right Media exchange.

Do video adverts work in RTB? Are there any restrictions on what can be shown?

Right Media fully supports rich media advertising, including expandable ads and video, which includes RTB.

We are introducing video player/pre-roll capabilities later this year.

David Moth

Published 25 May, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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