Real Time Bidding Ain't Real Time Targeting

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“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Dave Zinman, CEO of Infolinks.

When you buy display ads in an RTB environment, you're targeting audience based on intent. Your assumption is that you're reaching an audience while that intent is still fresh – that the message you're so carefully placing along their path is relevant to them the moment they see it. Truth is, it's probably not.

Nearly all impressions purchased through RTB are targeted based on past actions using cookies that are too old to reach shoppers in their "moment of truth," and could even be days or weeks old. Only a very small percentage of the more than 10 billion impressions per day available via RTB are based on real-time interests and intent. As an example, shoppers may read an article about home decorating trends, visit the Pottery Barn site, and then spend some time on HGTV.com. We can assume that these people are about to either decorate or renovate a home.

However, despite sophisticated targeting systems, advertisements purchased through RTB usually don't reach that consumer until they've moved on to another task. If they've returned to work-related searching or moved on to buying movie tickets, their interests have changed and the ad for curtains being served to them no longer resonates. Simply put, they aren't in the mood.

In an even worse scenario, they may have been searching for a particular rug or chandelier during that session – which may been have a week ago – and have since purchased one or the other and moved on. So the ads they're seeing for rugs and chandeliers are completely moot right now. (I can honestly tell you that I've had a pair of running shoes follow me around the web for weeks. Long after I'd purchased a pair offline, a pair I'd viewed from a certain online retailer appeared on nearly every site I visited.)

Although RTB leverages sophisticated technology, this method of targeting is seriously limited and puts display at a disadvantage when compared to search, which truly does target real time intent. If I type "lightweight running shoes" into Google or Bing, milliseconds later, I will have my choice of thousands of pages featuring the latest and greatest in athletic footwear, where to buy them, how much they cost, and articles recommending the best running paths, socks and water bottles.

Why can't display behave the same way? The context of many sites provides enough real-time data to deliver real-time targeting. I recently read an article that said that online advertising was the only industry in the world to be satisfied with a .1% success rate. Is this the best we've got, really? We can improve engagement rates for display by facilitating real time targeting at a granular level.

Think about how search works. The user types in query, and they're served with the content they've requested, along with ads that are highly relevant to that query. When people consume content online, the context often provides nearly as much information about their intent.

Search also makes real time decisions about whether to even serve ads or not based on whether there are relevant advertisements to show. Nearly half of all search results pages do not contain ads because the queries contain no commercial intent. Why do we serve up display ads on every page, regardless of whether the consumer has any commercial intent at that moment? Has it occurred to anyone that the relentless delivery of irrelevance enabled by our scalable ad targeting and delivery systems contributes to anemic response rates?

Until we can get relevant and granular with display targeting, I'm not sure we're ever going to see a reversal in click-through and engagement rate declines. Speaking from my own perspective, if display ads consistently delivered what I wanted right now – like, in this moment, a whitepaper from an ad solutions provider that can target real-time context – I'd be clicking! I'm not suggesting that ad servers need to have psychic capabilities, but there's enough data available to serve ads based upon the current desires and interests of consumers. Let's use it to target ads not only accurately – but with immediacy.

Follow Dave Zinman (@davebehappy) and AdExchanger (@adexchanger) on Twitter.

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5 Responses to “Real Time Bidding Ain't Real Time Targeting”


  1. Display ad and search ads act differently, and your points hover on more Direct Response goals rather than a marketer's overall holistic plan. Search can be bottom funnel, or even top depending on where the user is in their own personal sales cycle. As for out of date cookies, that can be attributed to having two disparate systems in play that are not talking to each other properly (a DMP or data provider trying to technically talk to the separate inventory buying tool, or DSP). That is a huge problem and definitely attributes to the display ads challenge. This is vital data and needs to be in the brands hands, and not hidden behind agency trading desks or third parties that don't give them direct access and transparancy. When brands finally take full control of their data by using a single system that captures their data (including search) AND buys their display using programmatic buying, then they have the edge up.

  2. Derek Kan says:

    Great article - reminds everyone to step back for a second and think what people are actualy doing on the internet. absolutely agree with the 0.1% benchmark

  3. Erin says:

    What about Search Re-Targeting companies (i.e Chango), who in real-time (via a RTB enabled platform) can deliver display ads dynamically based on a users search queries?

    You can apply recency targeting and get them within the hour of searching for specific keywords.

  4. Joel Nierman says:

    I agree that context has a large impact on the response rates of banner ads. But the problem with the argument is RTB is a solution for advertisers, not for consumers. At its core RTB enables advertisers to more accurately price every impression based on all available data on the user it is targeting and context, compared to the ad, goals, target and other advertiser criteria. While this has the effect of displaying different ads to each user, ultimately RTB and the associated data is a solution to help advertisers streamline the workflow and better leverage the available data against unique impressions, not change the overall ad experience for users. They will still get banners, but hopefully they are incrementally better targeted to produce better results through more relevancy.

    As for your other complaints about being followed by shoe ads, monetizing every page with banners, comparing search to display ads and being satisfied with a 0.1% success rate, those complaints are all dramatic over-simplifications , complaints about the economy of capitalistic advertising, or completely irrelevant comparisons. Why must every TV program have advertising? And I wonder what the response rate is for a normal TV ad... or radio spot.... or magazine ad....

  5. Chris C says:

    Definitely some good points brought up although I think it’s more precise to say that it’s more a case of not all RTB being created equal, rather than simply saying “nearly all” RTB is not that effective.

    This article reminds me of the one that came out roughly the same time last year on ExchangeWire titled “The Trough of RTB Disillusionment”. There are a lot of similar sentiments drawn up and now that another full year has passed since that one, I think some counterpoints can be made along the same vein that Melissa makes above. Namely, that the “promise” of RTB is certainly still there so long certain requirements can be met. RTB is still only a few years old – and even if most companies operating within it haven’t been able to fully take advantage of its capabilities, there are and will probably continue to be, a lot MORE companies who will figure it out. These will be the companies who realize RTB alone is not the magic wand to better targeting, but that other things like an ungodly massive amount of data and QUALITY data, will also be absolutely necessary. Sophisticated targeting algorithms likewise are necessary, but like the data, are not sufficient by themselves for success as you note with your example of the rugs & chandeliers. Instead, I think we’re starting to see the industry gradually understand some of what’s needed in order to “succeed” in RTB – whether it’s the necessity of some kind of real time data source informing the real time targeting or usage of attribution models appropriately suited for various display tactics.

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