Why Publishers Still Aren’t Crazy About RTB

Every week, you’ll hear a new breathless report on the growth of real-time bidding, very often issued by a venture-backed provider of RTB services. And there’s little doubt that it is growing, since programmatic ad buying in real time has obvious targeting and efficiency benefits.

But, as Digiday has pointed out, there are still some flies in the ointment. The biggest one is that for RTB to make the big leap — that’s the one where it cracks brand budgets beyond the direct-response guys — it must answer doubts about quality. Those doubts are real, despite the denials of the cheerleaders, and they’ll only go away when premium publishers see exchange-driven buys as good for their business.

We’re not there yet. New research from Casale Media, an ad network retooling for the RTB age, finds that publishers have a far different view of programmatic buying than buyers. In short, they don’t understand it all that much or really like it, since they see it as yet another way their ads will go for even cheaper. Consider these findings:

  • 84 percent said they’re concerned about RTB commoditizing inventory.
  • 76 percent are concerned about sales channel conflict.
  • 72 percent are concerned about risking direct relationships with advertisers.

This is more than just paranoia or, as many tech providers patronizingly say, “the need for more education.” It’s publishers doing the math. Right now, programmatic buying cuts down on direct-sales content. Premium publishers, the good ones at least, build up their brands in the direct-sales process. As one buyer put it to Casale, “Programmatic buying is allowing CPMs to go down from advertisers we’re used to getting a better price from.”

That’s where this ties into the buy side, which clearly doesn’t have these concerns. Yet it has a set of related worries. Casale found the three top things ad buyers want are quality inventory, more brand-safety guarantees and greater transparency.

And like most things in life, the answer probably lies in compromise. Private exchanges were supposed to be this middle ground, and they might end up doing that if implemented better. Andrew Casale, vp at Casale Media, said the first publisher efforts were doomed to fail because the number of restrictions placed on them limited bid volume. A simple solution is to link private exchanges more closely with direct-sales efforts, which still account for more than 80 percent of premium publishers’ revenue.

“There does appear to be an opportunity to meet in the middle with private marketplaces through the introduction of more human contact into this environment,” Casale said.

That’s the sensible compromise as publishers grow more comfortable with the idea of automated ad buying replacing much of the heavy lifting of display ad sales. After all, the publishers polled by Casale expect the chunk of their inventory sold via RTB to go from 10 percent today to 20 percent a year from now.

“It’s gone from huge resistance to acceptance,” Casale said.

https://digiday.com/?p=23527

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