With RTB, Premium is in the Eye of the Beholder

RTB is actually simply a set of pipes for reaching the audience, and determine what you’re willing to pay to reach them. Before the advent of RTB, there was very little way for buyers to value an audience. The earliest, most predominant display buying tactic emulated print. Buyers worked out deals directly with publishers because they wanted to associate their brand with a website, and because the site supposedly attracted their target audience.

Consider a luxury retailer. The New York Times is a premium buy for these types of brands, because it aligns with the brand messaging, and is visited by the type of audience who is likely to visit the brand’s stores.

But the brand may find that impressions on mid-tail, non-luxury sites convert to sales at an even higher rate. That’s not to say that luxury brands should abandon the Times altogether. Instead, it needs to determine what is most important for them, and then develop a formula that helps them achieve that goal.

But the brand may find that impressions on mid-tail, non-luxury sites convert at an even higher rates, with conversions being defined as sales. That’s not to say that luxury retail brands should abandon the Times altogether. Instead, it needs to determine what is most important for them, and then develop a formula that helps them achieve that goal.

If conversions are your goal, that’s what you should be willing to pay for. In that case, higher-converting inventory running on sites that are a far cry from The New York Times are “premium.” RTB allows brands to use a combination of audience and site to get their desired results. With sites like the New York Times, the brand pays for the site, and that’s OK. I’m sure some brands that buy directly on NYTimes.com see their ads convert at a higher rate elsewhere, but they’re willing to pay a premium because their brand matches the context.

With RTB, brands have that ability to weigh context and audience, developing a formula that helps accomplish the campaign goals. For many, they may be willing to pay a premium for the audience, no matter where it goes on the Web, with safety measures to maintain brand-safe ad impressions. Others might want to only reach their audience on specific sites. That kind of inventory will cost more in auction models, but again, if that’s the balance of audience and environment that the brand wants, they should pay the premium for it.

Advertisers want premium inventory, but they now have technology that helps them find inventory that fits their definition of premium. It’s not one size fits all, and shouldn’t be looked at that way.

Christopher Hansen is president of Netmining, an ad-targeting company.