Real Time Bidding

Posted on 21. Apr, 2011 by in Digital Marketing



Last Friday I attended the NMA Live conference in London on Real Time Bidding. It was an opportunity to inform and educate those within the industry about exactly what Real Time Bidding (RTB) is all about, what role it’s going to play in the future of Display Advertising, and what it can do for advertisers and their Display campaigns.

For anyone not familiar with the concept, this video gives a nice short summary.

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Jay Stevens from The Rubicon Project, and Marco Bertozzi from Vivaki Nerve Centre both provided the audience with an overview of RTB. The general consensus from them, and the other speakers at the event, was that Real Time bidding is fantastic, but you would expect that from a RTB conference wouldn’t you? The truth is though, that real time bidding, and running an ad campaign through a DSP rather than a traditional ad network does have many benefits. It allows you to serve ads to users on an impression by impression basis, site by site, user by user. Targeting individuals within your target audience, with results in a lot less wastage than a traditional buy with an ad network.

Real Time Bidding also allows you to alter how much you want to pay for serving impressions to users at various points on the customer life cycle. You can set up a campaign so that the bid price for an brand loyal customer is different from that of someone who doesn’t know your brand, and everything in between. This is all carried out by collecting relevant data from users, and using this to serve the correct ads to the right person at the most effective time. Whoever has the best information, and can use it the most effectively will perform the best. A pretty simple concept, but if you are running a campaign with 3 or 4 DPSs all serving ads and independently collecting data, things can get a little complicated. Less is more it would seem, but running on only one DSP also has its pitfalls. If a relationship turns sour, it may be difficult to hold onto the all important data that has been building up, and without this, you would need to start from scratch! Finding the right balance is key.

Those in attendance at the conference were either from an DSP background, or from an agency. Only one person identified themselves as an advertiser, which is possibly an indication of where RTB sits within the industry. It’s a fantastic thing, but not that many advertisers are aware of it and the benefits it has. It’s our role as an agency to inform clients of its benefits and if it can help achieve their campaign objectives.

Matthew Turner, Head of Online Marketing at BSkyB talked about how DSPs are a major part of Sky’s Display activity.  Display Advertising is growing as a digital channel and DSPs are a big part of it. Last year, £30m was spend via Real Time Bidding, this year that figure is expected to at least double, and may top the £100m mark.. In July last year, RTB accounted for around 2% of Display revenue for Sky, and this was up to 18% in January 2011. Turner hopes that by 2013, this figure will reach 50%. It’s quite a commitment, but why not? Turner says that the CPAs from RTB are coming in lower than that of the CPM buys in Q4 2010.

The session ended with a Q&A with the panel, and inevitably one of the first discussion that arose was the issue of privacy, and what effect the EU Cookie Directive will have on RTB. As data and user information is such a critical component of RTB, it’s something that has been top of the agenda for several months now. The industry is taking an active approach in the issue, and the IAB recently launched the Your Online Choices site,  which is there to provide information to users about how their data is used, and also allows users to turn on or off the behaviourally targeted ads they receive from specific companies. In the US they have already been testing a similar concept, and found that only a tiny percentage of user are clicking on the icon (0.002%), and of those who click through, only 1% actually chose to opt out. The rest chose to change the information that was there to make sure it was accurate, so it would seem that the issue isn’t about privacy, more about accuracy!

However, when the directive comes into force at the end of May, I would imagine that with a lot more coverage, and more information available to users, the numbers will rise.

So there’s no denying it, RTB looks like it could be the way forward for the Display sector. It’s growing, and it’s difficult to argue with the benefits. Gone are the days of “Spray and Pray”. RTB gives you better targeting, more transparency, and better results. Will we end up paying more for inventory? Possibly, but with RTB the money you spend is much more effective and you can run much more efficient display campaigns.

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