What You Missed If You Didn’t Attend OMMA RTB (Real-Time Buying)

Posted on Covario’s Blog today (3/26/2013):

I recently had the opportunity to attend OMMA RTB in San Francisco. Though I’ve been familiar with RTB (Real-Time Buying) since 2010, the industry is growing so fast, it’s hard to keep up with latest trends and developments. (It seems to change by the month!)

OMMA RTB was very informative and did a fantastic job in highlighting relevant topics (see further below for the highlights). The moderators, speakers and panelists were all great – though, for my taste, probably too agency/publisher heavy. I would’ve liked to see more brands give their perspectives on the internal challenges, processes and learnings with RTB (from launch to optimization). There was a client-side attendee sitting next to me, however she was just starting to experiment around with DSPs (Demand Side Platforms), like a few others in the room. (I believe there were only a handful of brand marketers attending.)

I’m somewhat surprised not everyone running display ads has jumped on the RTB bandwagon by now. Although, as was pointed out by numerous speakers, performance marketers have been faster to adopt RTB than brand marketers (true! based on my experience).

According to Magna Global’s Brian Monahan (@brionic), “RTB currently makes up 25 percent of all display ads and is expected to grow to 50 percent in the next five years.”

RTB should be a marketer’s dream – the ability to target the right (potential) customer at the right time, right place and right price based on his or her likelihood to convert. Marketers can finally bid on an individual impression in display (versus buying impressions in bulk) – just like in search marketing.

While, according to Monahan, RTB/programmatic buying is the second fastest growing medium after mobile (faster than paid search and video), there surely must be internal challenges that have prevented brands from testing the waters with RTB earlier on. I know I tried to pitch it to my tech organization back in 2010 (in fact, even blogged about Real-time Bidding and Optimization in Display Advertising), but didn’t have any success in getting buy-in. As a former colleague put it recently, it’s probably because “I was way ahead of my time.” Needless to say, I was quite excited when I joined the financial industry in early 2011 (a direct marketing organization), which was already testing out their second DSP. (By the way, check out Forrester’s research on “When And How To Run A DSP Head-To-Head Test.”)

Now that I’m part of Covario’s client strategy team, I’m still seeing low adoption rates across brands. I would love to hear back from you on your challenges in getting RTB adopted within your organization! If you’re on the agency side, what are your challenges in getting buy-in?

So, in case you missed last week’s conference, here are the highlights:

RTB Revisited: How the Market Is Tracking

Brian Monahan, Magna Global

Magna Global predicts that “RTB will be a $3.3 billion industry in the US in 2013, with YOY growth of 39 percent.” (RTB video is not included in these numbers, just display in the U.S.) Magna Global predicts that the “$3.3 billion will grow to over $7 billion by 2017.” Overall trends suggest that the “industry is moving away from experimenting with RTB to operationalizing” – RTB is not a tactic anymore. And here’s a little fun fact – the “average American is exposed to 2.3 ads per minute!”

Buying in Real Time: What are Brands Doing Here, Anyway?

Panelists: Brendan Moorcroft, Marcus Pratt, Alan Smith; Moderator: Ryan Polley

While performance marketers were first to embrace RTB, brand marketers are finally catching up. RTB works (proven correlation between viewability and ROI) and is effective at meeting goals. However, there are still many challenges in RTB: It primarily consists of display inventory; there’s lack of more ad formats available; and there’s the issue of scale when applying data to video (in terms of quality inventory).

RTB: The Road and Market Ahead

Karsten Weide (@karstenw­), IDC

One of the best presentations of the day! Weide noted that “mobile is growing 36 percent,” but “RTB is growing 53 percent annually! The biggest RTB spenders are the U.S., followed by Europe (24 months behind U.S. on RTB deployment) and Japan (may take over E.U.). Very little is happening elsewhere.” Weide went on to say that “publishers are afraid of RTB as it competes with selling premium inventory (which is their core business)” and that “RTB only works if there’s a lot of volume on the supply side (impressions) and demand (competing bidders).” He also pointed out that it’s currently “hard to close the feedback loop (measuring impact) for brand campaigns –need attribution to understand the most effective mix of media spend (and close feedback loop).”

Facebook’s FBX: The Year Zero View

Panelists: Christina Beaumier, Adam Berke, Brian Quinn, John Tuchtenhagen

FBX ads are fairly inexpensive – well below $1 (even as low as tens of cents), yet clicks are converting at a high rate when compared to other exchanges. Overall, the quality of FBX is also better than other exchanges (because users are logged in), though last touch attribution (which is flawed) naturally makes FBX favorable.

Are Private Ad Exchanges Working for Publishers and Clients?

Panelists: Doug Kim, Walter Knapp, Jeff Matisoff, Christopher Murphy, Rolan Reichel

The definition of private exchanges still differs. According to Ben Trenda (not on the panel), vice president of REVV Marketplace Development for the Rubicon Project, ”Private exchanges are real-time bidding relationships between publishers and buyers with more controls governing the trading relationship than would be the case in standard RTB auctions.” The panel noted private exchanges offer more overlay of data on impressions than ad exchanges (apparently this is premium inventory made available by publishers to select partners) and predicts that private exchanges will eventually move to a more open marketplace.

From Real Time Bidding to Real Time Marketing (RTM) Culture

Panelists: Adam Kleinberg, Marcus Pratt, Nicole Rawski

The definition of “real time” was discussed in this session – in RTB, real time refers to milliseconds, whereas in marketing real time means faster turn-around (hours/days). There was a lot of talk about marketers needing to be “vigilant at the speed of conversation” and “not confusing RTM with procrastination.”

Getting to RTB 2.0

Panelists: Doug Chavez, Jag Duggal, Jarvis Mak, Neal Richter

I really appreciated Jag Duggal’s point that “there is a lot of focus on lower funnel retargeting, prospecting has been forgotten.” So true. RTB can be very effective and efficient in finding prospective audiences similar to your existing customers. Jag further noted that in order to get to RTB 2.0, we need to fix attribution. Per Jag, “last view attribution is a problem… you are overincentivizing retargeting – it gets all the credit.” Other challenges that were discussed included that “RTB is not automated enough” and “viewability technology still immature.” I forgot who said “let machines do the tactical and humans do the strategy,” but it’s something we should keep in mind. Humans are still needed.

Is Mobile Ready for RTB?

Panelists: Mark Balabanian, Peter Baldwin, Joy Cavanagh, Paul Gelb, Krishna Subramanian

The panel noted that more mobile RTB inventory is available now versus 12 months ago. However, there are still such challenges as no cookies on mobile, the lack of transparency when buying RTB on mobile, and more supply than demand (a mobile challenge overall). Mobile provides hyper-local opportunities – the ability to leverage real time location targeting, including targeting by device type and downloadable coupons (which seems to get a better response on mobile than desktop).

Actionable Insights

  1. If you’re still running standard display ads, it’s time to get into RTB so you can get more out of display. Reach out to a DSP to get started. Not sure where to start? Check out Forrester’s Wave™ Demand-Side Platforms, Q4 2011. There are also a lot of resources out there to help you get educated, e.g. MediaPost’s RTM Daily and ClickZ. Alternatively, you can reach out to Covario for more advice.
  2. Share your experiences! As noted earlier, share your challenges and successes in getting RTB adopted within your organization. How are you managing RTB? Are you working with a DSP or Trading Desk? How do your media agencies fit into this landscape? How are you tackling attribution challenges? I’ll share it back out with the community – this will help other marketers!

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