5 Reasons Why RTB Is Not About Price

  |  December 19, 2011   |  Comments

Consider these five ways to be smarter in how you do online marketing through real-time bidding.

I work for a trading desk. For those that are unsure what that means, I work for a division of a media agency that is focused on buying advertising in real-time bidding (RTB) marketplaces. This is all quite new to me as it is for the whole online ad industry.

What I am coming to understand very clearly is that RTB is not really all about price. There is a lot of misinformation in the market about RTB. Principally, that RTB will crash CPM (expand) pricing, impoverishing web publishers. Apart from seriously not believing in this, I think that focusing on price is making people miss the point.

RTB is about process improvements that empower online marketing to be much better than ever before. RTB is about process. It's about what we can do and when. RTB is the gateway to powerful marketing online with banners.

Display media banners were once the king of online marketing. Search pushed banners into the shadows and those who have stayed with the medium have done our time as the "step-child" of online media. RTB turns things around and gives all the benefits of mechanical optimization of search marketing to a genuine broadcast medium.

I am a fan of search. I think search is the backbone of any campaign and if it is done wrong, then the whole campaign can't function. However, search has its limits; search can't create interest, desire, or awareness. For other reasons social media can't do what display can either. Display is a broadcast and reach medium and the other parts of online media do not perform anywhere near as well.

"If RTB is not about price, then what is it about?" You ask…

With RTB we buy ads one impression at a time. This gives us the option to choose between the impressions being offered to us. We can choose those impressions that give us the best chance of delivering against our clients' goals. We can act as smarter marketers. Here are five ways:

1. Message control. RTB is data-backed marketing. A trading desk can bring together any data the client has, along with third-party data sources and transactional campaign observations. This means that for some clients we can tell them precisely which impressions are their existing customers and who are not. Segmentation of messaging based on what the data can tell us about the relationship with the impression being bought, is a paradigm shift from how banner buying is done today. Creative messaging in campaigns can now take a formulaic approach and bring logic, intelligence, and process to the customer dialogue.

2. Frequency control. We have always been able to control frequency in online display advertising. What we have not been able to do, is control duplication of the audience across multiple websites very well. A trading desk employing RTB buying techniques solves this problem by forming a unique point to view the campaign's data. With all buying being handled by one platform and impressions analyzed one-at-a-time before we buy them, the audience is effectively de-duplicated. Once that is achieved, real insights on optimal frequency can be observed. Then real campaign-wide frequency controls can be put in place.

3. Audience control. The same processes apply to audience control. Let's say we have a collection of cookies that we have identified as belonging to an audience we really want to target. Without RTB these would be hollow insights that we could probably do nothing with. With RTB, we can check the audience of an impression before we choose to buy it. Buying ads shown to just those cookied users that we wanted. Add this to better control over the messaging and this gives brands a better way to place their brand messages on key audiences.

4. Content and semantics. Placing an advertising message in context and controlling the environment is very important. RTB gives new powers of targeting in this regard also. Messages can be placed into content verticals, that's easy and something we have been doing all along with banners. New RTB enabled tools allow us to look into the semantic meaning of the page contents and deliver ads against more focused content. No longer limited to broad content verticals, we can now target granular content and importantly avoid specific content with sites or content verticals.

5. Privacy. If all of this sounds as if it comes at the price of robbing web-users of their anonymity, then you would be wrong. This is another piece of misinformation about RTB and data-targeted ads. A publisher may well have personally identifiable information (PII) on you or any web-user. A trading desk does not, nor do they want to. Trading desks (or at least ours) are not interested in targeting people; we are interested in targeting data points. For targeting data points we don't need names or email addresses or phone numbers. We only have the cookie and when you clear it all, its attributes are gone. The desk is not going to resurrect cookies. These data points, unlike people (thankfully) have fast expiry dates (30 days, 60 days, etc.) and need to be actioned for the campaign quickly or be lost.

My question is "wouldn't you pay more for all these upgrades?"

Regardless of what happens to CPM prices, RTB is of a huge benefit to the advertiser. The effects of the reduction of campaign trafficking, price negotiations, and campaign paperwork make the buys faster, more accurate, and less labour-intensive to execute.

RTB is about much more than price. It's about process. It's about doing online marketing right. RTB is the future of banners and the future is bright.

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ABOUT THE AUTHOR

Matt Harty

Originally from Australia, Matt has lived in Asia for over 20 years. He started in the Internet in 1997 as the co-founder and employee No. 1 for SpaceAsia Media, the first Pan-Asian ad network founded in Asia. SpaceAsia sold in 2000 to Engage Inc. (CMGi) with Matt staying on after the sale. In 2003, he founded Activ8 Worldwide as a JV with Outblaze Ltd, which handled global media sales for Mail.com, Sanrio Digital (Hello Kitty), the Opera browser, plus a number of other leading brands. After the sale of Activ8's primary assets, Matt took a board director's seat on the Malaysia listed Oriented Media Group Berhad. In 2009, he took a position at News Corporation's FOX Networks as VP, Asia Pacific and Middle East. He is now general manager at Accuen, part of Annalect, Omnicom Media Group's business unit to lead the trading desk in Asia. Connect with Matt on Google+.

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