How to Power Your 2010 Media Plan with Real-Time Bidding

  |  January 22, 2010   |  Comments

An approach to buying display ad media can help meet conversion goals and branding objectives. Here's how.

By now, many media planners have heard about real-time bidding (RTB) and understand at a high level how this new way of buying display ad media can improve the campaign's operational efficiency and performance. But the question I get asked all the time is: how do I get started with real-time bidding and where is the low hanging fruit?

Before delving into some quick wins, let's briefly review the major benefits of real-time bidding. First, real-time bidding puts buyers in the driver's seat, because they can bid on each individual ad impression to optimize yield against their campaign goals. (See my first column for a more detailed introduction to real-time bidding.) Second, buyers can reach close to 100 percent of Internet users through a single buy because there are now over 10 "mega suppliers" of real-time bidding, and most of them have massive reach. (A review of these suppliers appeared in a prior column.) Finally, buyers can execute against their message frequency goals, even with tight audience constraints, because there are in excess of a trillion real-time bidding impressions available per month currently!

Now, let's dig into some examples of ways you can build momentum for your real-time bidding efforts, one for lower funnel conversions and one for upper funnel branding.

Lower Funnel Conversion Objectives

I expect that 2010 will see use of retargeting campaigns extend from the early innovators to the majority of marketers. Why? Because identifying site visitors who didn't convert and inviting them back with tailored creative has proven to be an effective way to prompt a sale, an information request, or enrollment in a loyalty program -- whatever the marketer's goal may be.

While once the exclusive domain of the high-reach or specialty ad networks, most retargeting campaigns are now executed on ad exchanges that allow marketers to turn their site audience into a retargeting segment on an exchange. Using real-time bidding, however, a buyer can now run the same retargeting campaign across multiple exchanges and real-time bidding inventory suppliers. The advertiser's audience segment can be loaded into a demand side platform that uses a server-side user mapping to identify and retarget site visitors across the Web. As with branding campaigns, marketers can leverage real-time bidding to not only get greater reach and frequency for retargeting, but also to simplify the process of buying and reporting through one global platform.

And perhaps most importantly, real-time bidding enables the advertiser to achieve superior price efficiency for retargeting campaigns. This is because buyers can bid on individual impression opportunities according to their value to the campaign. A buyer can create multiple segments of site visitors correlated to different values of activity or consumer. Likewise, a buyer can dynamically adjust bid prices, bidding more or less depending on progress against overall sales goals for the month or quarter.

Upper Funnel Branding Objectives

In addition to conversion goals, real-time bidding can also be used by marketers as an easy way to satisfy broad reach and frequency goals for brand awareness. A typical awareness campaign often involves a "head" of named media placements and unique content integrations and a "tail" of ad network placements designed to fill out the campaign's reach and frequency goals in a simple manner. Yet, delivering the "tail" across multiple ad networks isn't so simple. This is because media planners deploy the campaign to multiple ad networks to meet the reach and frequency metrics. And while each ad network can cap the frequency of ads across its users, there is no global cap across networks. This means that a frequency cap of three deployed across five ad networks becomes, essentially, a cap of 15.

Managing a campaign through real-time bidding solves this problem by enabling a buyer to institute a global frequency cap across all inventory. Because the buy is planned and served out through one system, rather than split across competing network silos, a frequency cap can be easily and accurately implemented. (For more on using demand side platforms to accomplish this, see my most recent column.) And the buyer doesn't sacrifice desired frequency of exposure, even with selective audience targeting, because the available real-time bidding inventory is so large.

A final word on running brand campaigns on real-time bidding inventory. Buyers who are concerned with brand safety sometimes ask how they can ensure that ad placements do not occur next to objectionable or brand discordant content. While brand safety will inevitably continue to face challenges in the era of social media, much brand risk can be effectively controlled through the use of advertiser-defined "black lists" and "white lists."

The examples above offer a good starting point for media buyers who are new to real-time bidding. As with all new initiatives, build support and demonstrate results for your organization or clients before scaling up your activities. The possibilities of real-time bidding are indeed significant, but your early investments in real-time bidding media don't have to be. Agencies and marketers who take this measured approach will not only be able to gain firsthand experience with real-time bidding and how it can work for them, but also realize the competitive benefits of being an early mover in this new media buying paradigm.

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ABOUT THE AUTHOR

Mike Baker

Mike Baker is president and CEO of DataXu. He has been pioneering digital media platforms for 20 years and is a widely recognized thought leader in interactive advertising. Before cofounding DataXu, he was vice president at Nokia, where he created and ran Nokia Interactive. Baker came to Nokia through its acquisition of mobile advertising leader Enpocket in 2007, where he was the founding investor and CEO. Baker was previously a partner at venture capital firm GrandBanks Capital. He has also been executive vice president at CMGI and Engage Technologies, an innovator in online advertising and behavioral targeting. Baker holds degrees in law and telecommunications management.

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