Comments on: Real-Time Bidding: The Ad Exchange Leaps

By: rightmediablog.com Blog » Blog Archive » Get Real (Time)

rightmediablog.com Blog » Blog Archive » Get Real (Time) — Thu, 04 Mar 2010 21:56:25 +0000

[...] real-time bidding capabilities and hook directly into Right Media’s supply pool. In fact, it is a topic of discussion in every client meeting I attend. Every moment matters and they want to optimize their [...]

By: Real-time bidding sounds painful

Real-time bidding sounds painful — Fri, 04 Sep 2009 20:25:05 +0000

[...] ad exchanges are implementing real-time impression-level bidding, as opposed to traditional impression-level auctions based on predefined rules. Mike explains the [...]

By: Vincent Granville

Vincent Granville — Wed, 12 Aug 2009 03:13:09 +0000

There are many limitations, but also great opportunities in real time bidding. A great opportunity is to change bids immediately after a new competitor comes in, or an old one disappears. Also, it handles traffic spikes due to click fraud very effectively.

Drawback: if revenue per conversion takes 2 days to settle (this was the case with one of my clients), real time bidding can be used only to filter out fraud and update ad position on page, but not for ROI optimization.

By: Why Publishers Should Implement An Ad Trading Strategy | FarneyMedia.com

Why Publishers Should Implement An Ad Trading Strategy | FarneyMedia.com — Wed, 10 Jun 2009 20:07:38 +0000

[...] becomes more sophisticated, more opportunities will emerge for “ad traders” - especially when real-time bidding becomes available. This is probably why the large publishers should now consider implementing an “ad exchange [...]

By: Zach Coelius

Zach Coelius — Sat, 09 May 2009 00:57:37 +0000

Eran,
As we discussed at the Clift, the big issue is visibility into where the ads are running on a per impression basis. Allowing those of us on the buy side to see where the ad is running and to who enables us to much for effectively price the value of the impression and pick the right ad to run. The only way that I can understand that this full visibility will occur is with RTB.

I think the reason that you haven't seen folks on the buy-side with the capability to handle this sort of bidding is that unless you control a very large network there in not much incentive to build the very complicated tech that is necessary until the RTB exchanges real scale. Thankfully that is finally starting to happen.

By: Eran Metzer

Eran Metzer — Fri, 08 May 2009 15:56:30 +0000

Lots of blue skies with the new approach and definitely where the industry is going.

We have yet to make progress on co-hosting servers and ensuring the efficiency remains as Tim mentioned. ROI will drastically get impacted by introducing the infrastructure to support RTB.

I find it that most company requesting the functionality are a bit confused on what exactly they are in need for.
Segment Bidding and a better transparency into the bid landscape can solve most of their needs.

Furthermore, not many are getting their advertisers input in real time, usually there is a 12 hours delay. So what ended up being a real time decision process, now becomes a 1 hour cherry picking and 11 hours of risk taking and frequency management.

ON the optimistic side, we are making a great progress as an industry to treat Media and audience as commodity, where the premium buys are futures and contract negotiation becomes futures.

By: Zach Coelius

Zach Coelius — Thu, 07 May 2009 17:23:58 +0000

Ohad is right, the buyside of the equation has a lot of work to do in order to be able to make valuation, targeting and optimization decisions in 50 milliseconds. Given that most ad buyers still use a fax machine and a spreadsheet, it is going to be quite a leap for some folks.

By: Ohad Gliksman

Ohad Gliksman — Wed, 06 May 2009 09:14:27 +0000

I have to agree with Zach here. While the technical challenge is great here, there is benefit to performance oriented networks and agencies here that will surpass any hardware and software costs. This is of course assuming that the agency in question is capable of reacting in real time to the inventory changes...

By: Zach Coelius

Zach Coelius — Wed, 06 May 2009 02:14:32 +0000

That is a very good point Tim. Another issue is bandwidth, as you scale the number of bidders in the system, you also exponentially scale the number of messages that are being passed. The solution that people are thinking is the answer to this is to use a cloud. That way it is just a question of scaling instances rather then servers, and bandwidth costs are minimized. It is not a trivial problem though. But I take heart that wall street seems to have solved it at scale. Though I do wonder what it costs. I imagine that the end solution will be professional media buying companies that handle the real time bidding for a enough clients that it makes economic sense.

By: Tim Ogilvie

Tim Ogilvie — Tue, 05 May 2009 23:14:43 +0000

I'm a bit of a skeptic as it relates to how widespread real-time bidding will become. As Zach notes, there's a significant cost involved with making the quick decisions required. Not only do you need the hardware to respond quickly, but your models need to be constantly updating to fully exploit the opportunity.

Even worse is the fact that you get penalized for being a picky bidder. You have to look at most impressions, but will only bid on a fraction of them. Your hardware needs to scale with the size of the inventory you're addressing, not the inventory you buy.

This adds a lot of frictional cost that, for many advertisers, will likely outweigh the ROI benefits gained by bidding in real-time versus updating bids every two hours. Those frictional costs are significant. If there are 20+ buyers in the auction, you're buying ~20 times the hardware to support real-time bidding versus updates every few hours. (Yes, there are scale benefits, but still real economic problems)

Does anyone know of a technical solution that addresses this problem?