The original use case for RTB protocol to make ad retargeting more efficient and scalable has been achieved.

Retargeting buyers are rejoicing in the massive scale, very low cost of inventory, and the ability to ‘pick & choose’ at the impression level without any purchase volume commitments.

Even pricing is totally elastic which, given the abundance of supply on exchanges, naturally results in ever lower prices. After all, why would anyone bid more at a buyers’ market auction?

RTB buying comes very close to a retargeter’s nirvana (unfortunately the same cannot be said about selling). One could thus proclaim mission accomplished, and take out the champagne.

But no. Technology vendors are already calling to RTB-enable publishers’ premium direct inventory: the premium priced guaranteed inventory ad networks, and retargeters amongst them, have never been allowed access.

RTB and premium inventory

So why will this premium inventory layer prove much tougher on RTB vendors to crack, if not entirely impossible, than remnant inventory was?

The answer lies rooted in understanding premium publishers, and the core use case for premium inventory: branding. In addition to understanding these premises, there exists another fundamental reality: marketplaces only function and prosper if both sides of the buy-sell equation are satisfied.

For RTB exchange trading, buyers seem a lot happier than sellers do. This naturally presents a major problem.

On the sell side, premium content publishers who have supplied brands the right audiences and quality media environments to grow and prosper for years, are seeing significantly less reason to celebrate over RTB and exchange trading, than e.g., retargeting networks (buyers).

Not only is this new impression level marketplace not at all aligned with their core clients’ branding campaign needs (where guaranteed reach and frequency, known audience, and known environment are key requirements), there is just too much technical and commercial complexity, reports of malicious activity, and increasingly questionable agency arbitraging on RTB inventory taking place.

Put simply, there are no sound arguments for premium publishers to make any remotely premium inventory available on RTB. Even participating with their remnant inventory is mostly done reluctantly.

This being the state of RTB, why are we bearing witness to an almost universal urge to push RTB into premium inventory?

Whilst many reading this can easily name half a dozen RTB tech vendors and retargeters whose own revenue targets, IPO plans, and trade sale hopes moving all digital advertising to RTB clearly serves (e.g., for SSPs and ad servers, it means making every impression ‘RTB taxed’ on a revenue share basis), I for one fail to see how premium publishers have benefitted from today’s RTB ecosystem, let alone how they would benefit from an ecosystem wherein all of their inventory would be RTB-enabled, and RTB-taxed?

What about the agencies’ upside in RTB?

Surely they must be winning big as they consolidate what was previously the ad networks’ margin for themselves, by forcing all clients to use their own Trading Desk (in stead of looking for the best solutions for each client; a norm for agency best practice until RTB – and what is still falsely assumed to be the case by their clients.)

No, agencies are not rejoicing (for long) either.

Whilst the agency trading desk has worked for a short time, agencies are already starting to be pressured by their clients to do what they are hired to do: to act as the brand’s agent, not as an opaque middleman arbitraging as much value from the difference between buying dubious inventory at discount (with no idea where their clients’ ads subsequently appear), and selling it to their clients at some 50 % markup.

It seems to be only a matter of time before “clients will call BS” on their agencies, like Adweek’s (April 10, 2013) insightful look at agency Trading Desks by Mike Shields points out.

Perhaps it is time premium publishers and their brand advertisers/agencies alike truly think about what they want? Not what the majority of tech vendors want them to want.

Surely premium publishers will benefit from more campaign buying and selling automation, and they absolutely will benefit from proper audience – and audience engagement – data.

But do they really benefit from the murky waters of exchange trading and the non-guaranteed impression level mechanics of RTB? Probably not. For agencies in specific, trustworthy and transparent agency buying simply cannot co-exist with straightforward arbitrage.

For the sake of premium publishers, and brand agencies alike, I genuinely hope we can see beyond the short term ad tech inflicted hype and mess, and can carve out a future trajectory that benefits first and foremost someone apart from ad tech itself.