In my last column, I examined opportunities that real-time bidding (RTB) innovations are bringing to advertisers. The ability to precisely value and select individual display ad impressions in real-time, offers game-changing improvements in campaign efficiency and effectiveness. This new approach to buying display media, however, requires advertisers to think through a set of evaluation criteria very different from standard publisher or ad network buys. One key consideration is determining which sources of real-time inventory may be right for a particular media plan. This article provides buyers with a “101” on the suppliers of RTB ad inventory.
The good news is there’s a large and growing supply of inventory available through real-time, auction-based markets. But, there are many providers offering different flavors of RTB. The providers fall into three categories: ad exchanges, publisher yield optimizers, and ad networks. What makes these suppliers different from traditional exchanges and networks? They all offer an application programming interface (API) that can handle the technical complexity of real-time bidding. An API is simply an interface that enables software programs to interact with each other in specified ways.
Beyond their baseline technical capabilities, however, each supplier of real-time inventory offers different features and benefits. Differences are abundant and span economics (fees, billing, payment), media (quality and quantity), technology (ad server integration, etc.), and data policies (for collection and usage). To keep things simple, we’ll dive into these topics in a later article.
OK, so here’s the roster of impression aggregators that offer advertisers real-time bidding:
Ad exchanges are the pioneers of the auction model for display advertising. They currently manage the majority of available real-time inventory. Google’s much-anticipated display exchange launched in September offers inventory from the Google content network and also DoubleClick’s DART for publishers. The volume of impressions is quite large and expected by some to grow over the trillion-per-month mark in 2010.
Yahoo’s Right Media Exchange (RMX) is the granddaddy of the space, introducing the world to static bidding for display placements across 180 billion impressions per month. Both premium and “long tail” inventory is available. Yahoo is now running a private beta test of RTB. Microsoft’s AdECN has been running a limited test of its real-time bidding capabilities in recent months, and its Federated system is reportedly readying for a launch in January with inventory initially from MSN-related sites. Other exchange players who have announced real-time bidding include ContextWeb’s ADSDAQ and OpenX’s OpenX Market.
Publisher Yield Optimizers
The publisher yield optimizers, like PubMatic, AdMeld, and Rubicon Project, are also embracing real-time bidding. Given their primary role of optimizing publisher revenue across multiple ad networks, these firms don’t work directly with advertisers, but rather connect to ad networks and bid management platforms (sometimes referred to as demand side platforms) operated on behalf of advertisers. In general, the publisher yield optimizers tend to feature a solid percentage of premium inventory.
PubMatic launched real-time bidding in early 2009 and continues to push forward with various enhancements. AdMeld recently launched its RTB offering, yet appears to be scaling it quickly, announcing its “billionth real-time bid” days ago. By monthly impression volume, Rubicon Project is the largest of the sell-side optimizers, and some in the industry expect that it will soon have an RTB offering, as well.
Even ad networks are getting in on the real-time bidding game. While there are a bevy of ad nets in the marketplace, only a select few offer their inventory for sale on a real-time bidding basis, including Fox Audience Network (FAN) and AdBrite.
Beyond understanding the various sources of real-time inventory, advertisers interested in this new display media paradigm have to do their homework. If you’ve decided that real-time inventory is right for your needs, the next step is to decide whether to access it directly via a single inventory supplier, multiple suppliers, or through a demand-side platform that can connect your campaign across the suppliers. (We’ll explore this topic in coming months.)
The group of suppliers currently offering real-time bidding may be small, but the available volume of auction-based real-time inventory will grow from an estimated 10 billion per day currently, to 50 billion per day in early 2010. This explosion in volume, combined with real-time bidding’s performance, yield, and targeting advantages, reinforces that this is more than a trend, it’s here to stay.
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