Have you ever gone to a marketing company's website and you still can't figure out what that business does? After five minutes on the site, you leave wondering, what do they actually do?
Since the display landscape has changed dramatically in the past few years, this happens more than ever in the display ecosystem, and the plethora of solutions out there for accessing real-time bidding (RTB) inventory can be confusing.
There is a meaningful segment of marketers that say in effect - there is so much hype and so much incomprehensible talking in RTB that I'll stick to what I know. But let me say emphatically, that would be a mistake.
RTB is worth it.
Every marketer should be buying RTB display remarketing. I suspect some of you read that last sentence and want to give a moment of silence for the part of you that died once upon a time when you tried to make some display effort of yesteryear work. Keep that justified, skeptical, and cautious guard up as we look at why this can be different.
First, RTB gives marketers the opportunities to look at hundreds of billions of impressions per month and only bid on those that are interesting to them. Second, since the auction is fairly transparent with lots of metadata, there is both room and need for technology companies to build unique optimization and bidding technologies. So huge amounts of intelligence and data can be layered into this environment (more than any other marketing channel - on or offline). Third, RTB is hundreds and often thousands of percentage points more effective than display was three years ago, even with the very best tech of that day. As a result, forget about every experience you had with display before because the world is different now. And finally, because every marketer can easily access so many impressions, display RTB remarketing is the lowest hanging fruit in all of online advertising.
Chances are you've dialed in your search dollars. Of course, there is always room for improvement. Search deserves and demands attention, but for most marketers they are asking - what more can I do? In almost all cases, RTB display and remarketing is the clear answer.
The next question: how do I get access to all of these hundreds of billions of RTB impression views?
To begin, a word of caution - whenever someone says they buy RTB display, press them further for more details. In some cases they're buying direct from one of the exchanges with no proprietary bidding technology of their own. Other times they're convinced that buying direct is optimal. I've been asked by more than one advertiser, "Why would I use a DSP when I can buy from the ad exchanges myself?"
If you're new to the world of display, it may not sound like there's much of a difference. Both can work to access RTB inventory. But if you're looking to take your display campaigns to the next level, let's break down the advantages of using a bidding technology like a demand-side platform (DSP).
All exchanges operate differently, but in most cases you can access cheaper inventory when buying through the exchange's API via a DSP. This may seem counterintuitive, but impressions can actually be cheaper by using a DSP than buying direct through a UI of an exchange. Nevertheless, I would never base your decision solely on where to get the cheapest impressions. The question you should be asking is where you can get the most cost-effective inventory, performance, and access to the users you want to message to. Display is like search on this issue. Being in position number nine on any given keyword will always be cheaper than position number two, but it is most likely not as valuable even when weighting in the cost. Similarly, DSPs may bid more aggressively for the impressions that have a propensity to convert. The granularity of the bidding features and the targeting of which impressions to buy is the real differentiator. In short, the tech that good DSPs have may come with a cost, but it can and should create more value than it costs.
Second is the difference in reach. Rather than buy direct from one exchange, DSPs integrate with all of the major ad exchanges. The more reach, the more efficient a campaign can work at scale. Recency and frequency matters tremendously with remessaging, so 6 million sites allow you to find those users much faster while the data is still relevant, than say what 100,000 sites can do.
One could try to overcome this by buying from all of the exchanges individually, but in addition to being an operational mess, you wouldn't be able to have a universal frequency cap and make holistic decisions. The advantage of buying from all the exchanges on one platform is that the data and insights that a DSP gets in one exchange are applied to the buying decisions across all the other exchanges in real time. You can't do this manually.
Also, direct and DSP have very different value props on optimization. A good DSP is going to help you see how display and remarketing fits into your holistic marketing efforts. They are also going to optimize impressions using data from other channels and insights from all of the exchanges in one central place. The exchanges themselves really can't offer any of that.
Lastly, demand-side platforms are named accordingly, because they only represent the interests of the advertiser. DSPs are incentivized to only buy the impressions that matter and to buy them at the best possible price. They represent you. Not the market or their inventory.
A good DSP is going to be upfront with you about cost. It will create more value than it costs, and it is the best way to grab the lowest hanging fruit in online advertising - RTB remarketing.
Jeff is off today. This column was originally published on April 27, 2011 on ClickZ.
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Jeff started his Internet career working for a small interactive agency, where he led media buying and trafficking and managed all vendor relationships. Afterward, he founded a CPA network, eBound Strategies whose technology was designed by Jeff and later acquired by Nami Media in 2003. Jeff worked for Nami Media as the VP of operations, and subsequently left to found AdECN, the first exchange for online advertising.
Jeff is considered one of the few pioneers of the ad exchange. As COO and founder of AdECN, he led all strategy, product, and business development. Jeff is a thought-leader in real-time bidding technology. At Microsoft, Jeff oversaw AdECN exchange business, ran all reseller and channel partner business, as well as advised the all-up strategy for the online services division. In October 2009, Jeff left Microsoft and AdECN to found The Trade Desk.