A new Real-Time Bidding buyer's guide from Econsultancy provides a snapshot of the exchange-traded media landscape, along with an assessment of today's demand-side platforms, trading desks, and supply-side platforms. Its overall conclusion is that RTB systems are maturing perhaps more quickly than might've been expected, though a lack of measurement consistency and other problems may be hindering marketer adoption.
AdExchanger spoke with Monica Savut, senior research analyst for Econsultancy.
What surprised you in the process of developing this report?
MONICA SAVUT: What struck me most was how fast the market is moving from the experimentation stage to sustained growth and delivering technology that scales. The whole sector has done a great job of educating advertisers and publishers about the benefits of programmatic ad trading and overcoming the most common myths and misconceptions related to RTB. It’s also encouraging to see how vendors are working together to develop industry-wide standards and define APIs that can be used during the media purchasing process. These are the first signs that the market is starting to mature and that adoption will accelerate over the next few months.
How do you rate or quantify maturation of the RTB marketplace, and how close is it to widespread acceptance among media buyers and sellers?
Generally speaking, RTB spend has almost doubled in 2011 compared to 2010, so we expect to see similar growth this year. There’s no doubt that the US is at least 12 months ahead of Europe, but adoption in other markets, particularly EMEA, APAC and some countries in Latin America, is growing quickly. Globally, we expect RTB to account for a quarter of total advertising revenues by 2015, compared with more optimistic forecasts of 50%. Both media buyers and sellers are still at an experimental stage, so we’re at least a couple of years away from widespread acceptance.
What does “widespread acceptance” look like? In terms of share of the market, what is the right eventual balance between RTB/programmatic and high- touch/direct sold inventory?
There’s no "right" balance between programmatic and direct sold inventory. Moreover, that is a really hard number to put your finger on because the market is moving so fast. The most significant challenge the industry is facing is the status quo: while the technology is there to facilitate the automated trading of inventory, advertisers need to become smarter about their approach to media buying.
We’re seeing a move towards audience-led buying, but many brand advertisers still don’t recognize the value of augmenting their buys with data. A large proportion of the current RTB spend is related to what we might call "low hanging fruit," so we’ll see widespread acceptance once media buyers realize the full potential of RTB and move from basic retargeting and direct response campaigns. As with any disruptive technology, it requires a shift in how marketers approach the space and adoption is highly dependent on how vendors accommodate these changes and manage expectations.
In the report you mention that from July 2010 to January 2011, RTB grew from 2% of BSkyB’s display ad spend to 18%. How exceptional do you think Sky is as an ad buyer? At the extreme end of early adoption or somewhere in the middle?
Speaking at an NMA event, Sky’s Head of Sales and Online Marketing, Matthew Turner, said he expected this to grow to as much as 50% as the market becomes more established. So the company is definitely an early adopter – advertisers who are sophisticated in their application of data are spending up to half of their online budgets through RTB, with those in the middle spending around 25-30%.
Where do you observe the biggest pain points are for marketers in the RTB ecosystem?
One of the most significant challenges for marketers is the lack of measurement consistency. There’s been a lot of talk about channel integration in the RTB space, but marketers still have to face a lot of technological and workflow challenges. Fortunately, industry insiders openly acknowledge that online advertising lacks solid, intelligent attribution models so the market is at least moving past the "turning a blind eye" stage. Agreeing on a consistent RTB "language," defining standard RTB APIs and establishing a common set of metrics to evaluate success will become critical to vendors’ efforts to bring more marketers on board.
What about for publishers?
As was the case last year, much ink has been spilled on publishers’ concerns around sales channel conflict, price deterioration and brand erosion. They’re certainly ongoing concerns on the publisher side, but the industry has moved a long way in the last 12 months. Vendors have been making strides at educating the market, so publishers are releasing more inventory (in some cases even premium placements) to supplement the efforts of their direct sellers.
It’s certainly not only bad news, especially when it comes to private marketplaces. Making deals via private marketplaces is sometimes seen as a more conservative way of getting started with programmatic buying. They are increasingly used among publishers with high sell-through rates, as they’re looking to restrict inventory access and get the maximum price on every available impression.
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