There’s a lot of hype surrounding real-time bidding, but not all of it is accurate or useful. Here are 10 things you should know about the technology and what it means for advertisers, agencies and publishers:
– Real-time bidding still accounts for a small fraction of digital ad sales. It accounted for between 10 and 20 percent of total digital display spend in 2012, according to estimates from agency groups like GroupM and Starcom MediaVest.
– The technology has enjoyed rapid growth from a small base in the past three years, but that growth could be slowing. Estimates from eMarketer peg the value of media traded using the technology grew 98 percent in 2012. In 2014, it forecasts slower growth of 36 percent.
– Not all publishers are embracing real-time bidding. Despite what advertisers and vendors say, many companies on the sell side believe that RTB is, or will be, a bad thing for their bottom lines. Some, like Turner and USA Today, are shunning the technology almost entirely, citing concerns that the potential rewards are currently far outweighed by the risks.
– The number of demand-side platforms continues to grow rapidly. Owing to the rapid growth of RTB adoption among advertisers, everyone’s trying to get in on the action. There are currently more than 30 standalone DSPs operating in the U.S., for example.
– Not all DSPs are real-time. The definition of a DSP remains vague, which means many in the ad network space claim to have real-time capabilities but really operate closer to the traditional ad network model of buying up inventory in advance, before repackaging and reselling it. That said, some are adding to RTB capabilities in the hopes they can compete with DSPs for budgets.
– Retargeting drives real-time bidding. Despite the promise of using RTB to identify and target potential new customers, a huge portion of impressions traded using the technology are actually used to re-message existing ones, or users that visited marketers’ sites without making a purchase.
– Google is doing its best to dominate the RTB arena, by offering a full suite of products for those on both the sell side and buy side of the table. It’s invested more than $1 billion in RTB since 2009, including the acquisitions of AdMeld, Teracent and Invite Media.
– Facebook’s exchange could help drive significant growth in RTB, too. Since it launched last summer, advertisers have reported lower cost-per-acquisition than they’ve found on other exchanges, as well as safer brand environments.
– The bidding might be real-time, but the targeting isn’t. Advertisers and agencies might be buying impressions in real time, but the data they use to inform those impressions isn’t always fresh. While they might be targeting the right users, it doesn’t necessarily mean it’s at the right time.
– Right Media launched the first ad exchange in 2004 but was not the first major exchange to offer real-time bidding capabilities. It eventually rolled the feature out in 2010 after Microsoft and Google had already done so with its AdECN and DoubleClick Ad Exchange products, respectively.
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