Real Time Bidding (RTB) is growing and the data out there shows there is no sign of it slowing down. Twitter purchased MoPub for $350 million, Rocket Fuel’s IPO has been a success, and AppNexus’ has grown rapidly, with IPO rumors circulating for sometime later this year. So clearly, RTB is the hot thing right now in advertising and it is now making its way to mobile.
Even with all this growth and advances in RTB technology, there are still a lot of myths out there about the pitfalls of RTB and Mobile RTB. Lets go over some of the main ones:
Myth 1: Premium Publishers Are Not on RTB Yet
Premium publishers may be underrepresented on RTB today, but I predict this will change dramatically by the end of 2014. Now there is data from Adomic that shows 20% of the top 3000 publishers’ inventory, on average, is going to RTB. They may not be selling their top banner ad space through RTB yet, but these top tier publishers are starting to put their other inventory on RTB ad networks. This trend will continue to increase as publishers leverage blocking tools on exchanges that enable them to prevent certain brands, advertisers, and even referral URLs from advertising on their inventory.
RTB can also help publishers’ direct sales teams. RTB allows publishers to see which advertisers are bidding on their inventory, which is intelligence the sales team can use to increase direct sales to those advertisers. Publishers’ sales teams can see the CPM bids for the inventory too, which could enable them to increase their CPMs on the direct sales side.
Myth 2: I Don’t Need RTB Because I Can Just Buy from Mobile Ad Networks
Currently, if you were to scour the internet for mobile ad networks, you will find that there are currently over 400 ad networks globally. There is no denying that all of these networks share some of the same inventory, as time goes on, it’s going to be very hard for them to differentiate. If you are the advertiser, how do you decide between all of these ad networks? With this lack of differentiation, what happens next for these mobile ad networks? We here at TapSense believe we are going to see further consolidation of ad networks, across both mobile and desktop. What does this consolidation look like? The answer depends on who you ask, but I believe we will see an arms race among major players like Google, Amazon, and Yahoo. These major ad networks are growing and increasing their ad revenues, and smaller ad networks cannot keep up. Rather than waiting for diminishing revenue to drive them out of business, smaller networks will look to get acquired by larger players.
Myth 3: Buying RTB is Too Hard, Expensive and Complicated for Marketers
I’ve heard this for over a year now, and I do believe back in the early days of RTB, it was hard, expensive, and complicated to get started. In the RTB space today, however, it is actually very easy to get going. Before, you would have to set up a trading desk, ensure you are connected to the right ad networks, and then ensure you have the proper DSPs in place so you are not depending on just one DSP. Today, setting up RTB advertising is as simple as placing a phone call. The number of ad tech companies that allow you to purchase inventory via RTB are increasing. Whether you are trying to purchase inventory to drive clicks (through ad buys) or to drive conversions (through retargeting) there is an ad tech vendor that can solve those needs. Today, it is also considerably less expensive to get started. With ad buys being as cheap as $1000-$1500 per month, and retargeting campaigns as cheap as $500-$1000 a month, it is very easy, even for smaller advertisers, to start running RTB campaigns.
Myth 4: RTB Inventory is All Remnant Inventory, So it Does Not Perform
The myth of poor performance is another common misconception I have heard about RTB. Although only a minority of the top premium publishers have their top inventory on RTB networks, there is plenty of additional high quality inventory on RTB ad networks, and it does perform. Data proves mobile RTB performs better than non-RTB campaigns. Adfonic, a mobile DSP, found that mobile RTB CTRs are 100% higher in the UK, 97% higher in the US, 80% in Australia, and 50%+ in France and Holland, compared to their non-RTB counterparts.
Why do RTB campaigns perform so much better than non-RTB campaigns? The targeting capabilities of RTB campaigns ensure users see ads that are specific to them in some way, such as a retargeted ad from a website the user visited in the past. All marketers know that when users are shown ads that resonate with them, they are more likely to engage with that ad regardless of ad location.
In conclusion, it’s time for marketers to rethink RTB. Abandon preconceptions about premium vs remnant inventory. If you were to ask five people in Ad Tech to define “premium” inventory, you would get five different answers. Rather than focusing on whether your ad buys are premium or remnant, let the ad performance data drive your decision making about where to invest your ad dollars.