RTB Is Boring

Ad Agents“Ad Agents” is a column written by the agency-side – and those servicing it – of the digital media community.

Martin Kelly is co-Founder and Managing Partner of UK-based, demand-side trading, specialist firm, Infectious Media Ltd.

There’s a huge change going on at the moment.  It’s an exciting time, but I was really struck by Adam Cahill’s presentation talking about how clients don’t really care (here).  Writing on Adexchanger, I’m preaching to the converted but this is a select global audience. The reason that real time bidding (RTB) isn’t getting more mainstream attention is the fact that display advertising, which it powers, is not something new.  When the pay-per-click search model emerged, this was genuinely the emergence of a new channel but online display advertising has been round for a long time.  RTB is actually an infrastructure change, and for that reason, to those outside of the space it’s actually not that interesting.  Impression level media and creative optimisation is a game changer, there is no doubt in my mind but to a large retailer, travel company or telco this is only half a story as we’ve forgotten to tell them the punch line ie how this is relevant to their business.

Marketers challenges are entirely consistent (more revenue, less cost) and whilst new concepts interest them, new and applied solutions to their problems are what excites them rather than theory and hype.  Currently we’re trying to excite people with abstract technology concepts and this is where we need to see change to move forward.  The first type of company that has articulated a tangible and scalable solution in this space is the CPC remarketer.  Built out on RTB infrastructure you will however never see a self-congratulatory sales deck talking about RTB or the new ecosystem.  Instead you will see a compelling story about consumers that click on adverts and buy products – many more so than have done before in a typical display advertising campaign.  Incredibly simple but hugely effective and easy to understand, it ticks every box for the marketeer.

So, who are the companies then that are going to articulate these products?

There’s been a lot of talk about how innovation will be embedded in the service layer but I’m not sure I buy into this fully, at least not the traditional definition of a service company.  At the most basic level the raw infrastructure of a DSP gives you the opportunity to buy impressions via RTB.  Many service companies have seen this as the vehicle for cutting out ad networks and replicating their model at a lower cost, which it absolutely can do.  But this is not the right way to think about what this type of buying can offer as it misses the larger opportunity to really change how display media functions for marketers.

It’s my feeling that there will be another layer of company that is part service and part technology, which will build-out customised media, data and creative technology on RTB infrastructure.  These hybrid focus companies will provide the advertiser-side customisation that makes this type of buying relevant and easy to explain.  To do this they will provide four key technology competences:

1)   Database integrations

Linking up advertiser databases to buying tools.  For different types of advertisers this can mean different things.   For a retailer this could be about feeding in stock availability and pricing whilst for a credit card company it could mean identifying creditworthy or high value customers and modelling target audiences off these groups.

2)   Creative optimisation tools

Without the correct creative message, targeting an audience segment is almost pointless.  Obviously showing someone the last product they looked at for a retailer is a strong proposition but how does this work if you don’t have a large database of products?  Developing custom dynamic creative frameworks for advertisers and empowering creative agencies to use these tools will be key.

3)   Custom algorithm development

Optimisation of media buying is not a one size fits all approach and different advertisers will see different factors influence return on investment that need a bespoke approach.  These strategies will need to be implemented via a custom bidder that plugs in to a DSP rather than using the basic tools available in the standard UI.

4)   Database management

Everything flows from the data and being able to manage and analyse it is key.  A DSP, like an adserver, will give you access to generic reporting (impressions, clicks, number of conversions etc) but the real stories can be found in the raw logs and being able to cope with these will be critical.

These are complex skills, but to create effective products for advertisers, they are  a must.  At Infectious we’ve evolved our offering over time to a point where the tech is secondary to the solution, which is the way it should be.  The simpler things are, the easier it is to sell to marketers and ultimately it’s their buy-in that we need to make the industry a success.

Follow Infectious Media (@infectiousmedia) and AdExchanger.com (@adexchanger) on Twitter.

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1 Comment

  1. MeganPagliuca

    I couldn’t agree more but would add one more point. With the competencies 1) and 4), having both the integrations into the customer databases as well as the skillsets to know what to do with the data, the ability to solve for the holy grail of attribution between all channels becomes reach-able. Marketers can then accurately measure the impact of display relative to all other channels and attribute the correct CPA, whether the conversion happened on the website, in a store or from a call center. Accurate measurement will allow for accurate budget allocation. This audience knows that means share shift to digital. Companies that host customer databases, like Merkle, will lead here.