The Holidays Bring Big Changes In The RTB Ecosystem

HolidayRTBThe practice of real-time bidding (RTB) has grown and evolved significantly this holiday season. While RTB traditionally targeted bottom-of-the-funnel prospects, this season it’s being used increasingly for branding, which means more verticals are applying it.

Additionally, this year’s truncated shopping season — which places less emphasis on Black Friday and Cyber Monday — as well as new inventory sources like Facebook Exchange (FBX) have kept CPMs from spiking as high as they did in the past.

With marketers expected to spend $3.34 billion on RTB ads this year – a 74% increase from last year, estimates eMarketer – advertisers beyond the retail vertical are taking advantage of RTB.

Andrew Casale, VP of strategy at Casale Media, noted that last year retail dominated RTB business for the media and technology company (followed by telecom, automotive, travel and financial).

This year, however, things are trending a little differently. While retail is still RTB’s top vertical (20,000 brands bought media through Casale Media’s platform this Cyber Monday), “it’s maybe not as dominant this year as it was last year,” Casale said. “The other categories are really becoming a little more mature in terms of the usage of the channel.”

An automotive advertiser, for instance, pushed promos in its creative and its messaging for deals between Black Friday and Dec. 6. Although the breadth of RTB campaigns last year trended toward lower-funnel messaging — incenting consumers to click banners and save money by buying items immediately – Casale noted that this year there was an emphasis on branding and awareness, such as the aforementioned automotive ad campaign.

“Nobody’s buying a car online, but they’re putting their messaging out competing with the retailers and consumers’ share of [attention] and wallet,” he said.

The RTB industry is also watching the effect the shortened shopping season — there are only 27 days between Thanksgiving and Christmas — will have on inventory pricing. So far, while the industry is experiencing the traditional seasonal CPM price increase, it’s not as drastic as in years previous.

“Looking at some preliminary data, there’s definitely been a spike [in pricing] but it’s nothing like we’ve seen before,” remarked Natalie DiBerto, director of display for VivaKi’s programmatic Audience on Demand (AOD) platform. “We’re looking at maybe 25% [uplift] instead of [up to] 100% like we used to see.”

This is because the spending days surrounding Black Friday and Cyber Monday are “bleeding over” to include even the days preceding the free shipping cut-off (typically falling between Dec. 21-23). The sharp delineations dictating when consumers can save and when it’s most advantageous for them to buy are no longer there and consequently, pricing spikes have leveled off.

The truncated shopping season this year, Casale said, accounts for marketers’ decreased fixation on Black Friday and Cyber Monday as standalone days for bid spurts. “Tuesday, looking (at our data) in real time, is looking as strong as Cyber Monday so it feels like budgets didn’t just stop on Dec. 2, which is a more unique trend we hope will sustain,” he said.

Another factor lowering CPMs is the distribution of marketing budgets across new channels, which creates more supply sources. Consider Facebook Exchange (FBX), which was introduced around this time last year and is what DiBerto calls “a huge inventory source (that’s also inexpensive), which is going to bring the overall CPMs down.”

The great fluctuations in CPM that VivaKi AOD used to see in years past have since  leveled out dramatically since new supply sources have opened up.

“Everything is much more intertwined now,” she added. Ad networks are sourcing diverse mixes of inventory where “it’s much more of an ecosystem now than previously before when you had just a few sources.”

Casale also noted FBX’s impact on the overall RTB ecosystem. “I will say that when the [Facebook] Exchange first came in, we and our peers noticed a short-term dip in demand because there was only so much budget and now we had a massive amount of scale added,” he said. This year, there is much more positive momentum, he says, “which indicates to me that there’s a lot more budget throughout the overall ecosystem than there was prior to Facebook’s entrance.”

He added, “I can tell you that Facebook has drawn a lot more brands into the ecosystem that weren’t there before and that’s evident in the number of brands we saw buying [programmatically on Cyber Monday].”


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