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Getting RTB (real time bidding) right is the key to success for many of the companies in the digital media ecosystem.

This post explores the trends in real time bidding to look for over the next 18 months as systems provide more premium inventory; enable private exchange buying; move beyond display into other digital media types; and provide immediate buying opportunities.

Why RTB is important 

Last week, I wrote that companies that depend on what we think of as “RTB” are in danger of missing larger opportunities. I argued that RTB technology is important, but that advertisers still need inventory quality, contextual relevance, and scale—something that today’s real time platforms are struggling with.

If the game is truly about utilizing data to target audiences, companies are also burdened by an uncertain legislative environment—and the fact that big players like Facebook have an impossible data advantage.

My point was not to dismiss the technology itself, only that RTB is only a single piece of the larger digital media puzzle. Getting RTB right is also the key to success for many of the companies in the digital media ecosystem. Here are the trends to look for over the next 18 months:

Moving upscale

Let’s face it: agencies want to buy what they want, when they want. It doesn’t matter how cheap the prices are. The problem isn’t that agencies don’t understand that some inventory is better delivered through RTB.

The problem is that their clients want their ads seen in certain places, and they want to know exactly where those ads will appear, and when they will appear. Clients also tend to want their ads to appear on sites that they have heard of, not necessarily “OpenX  Longtail” or “PubMatic Default” no matter how great the performance is.

Human nature is all about exerting control over those things we can control, and it’s no different with advertising. The desire for control in real time bidding leads naturally to demand side domain grouping, in which advertisers carve out limited tranches of pre-approved inventory into which to bid, and forego many of the pure remnant options.

Now that publishers have spent some time exposing their inventory to DSPs, they now have more experience working the systems, and a better sense of what floor prices to set for certain inventory types.

I recently had lunch with a large vertical publisher who told me that he recently discovered that a small amount of his inventory was consistently being won at a $1,700 CPM (it appears as though some DSPs do not offer a pricing cap for automatic bids)!

At one time, technology companies understood how to monetize inventory better than publishers, but that dynamic is rapidly evolving—and for the better.

After a few years of premium and remnant monetization, most publishers have a sense for where their inventory sells and performs best, and they are quickly realizing the benefit of putting more premium inventory up for bid to a trusted pool of advertisers.

Watch over the next several months as more publishers take the lessons of exchange-based inventory selling, and start turning $5.00 CPM inventory into $10.00 CPM inventory by leveraging RTB technology to create small, private exchanges for their best inventory.

Private exchanges

These private exchanges are more than just a way for publishers to create increased competition for their premium impressions for an installed demand base. Private exchanges are an important piece of the entire monetization puzzle for publishers.

Salespeople are motivated by commission plans, not necessarily corporate strategy, and they are also expensive. Reducing the cost of sales—while insuring that every premium impression is monetized properly, and at full value—is top of mind for all publishers right now.

They got beat on remnant inventory technology, and you better believe that they won’t get fooled twice with their premium supply. They are going to figure out a way to let technology help them control and monetize it, and they are going to keep the lion’s share of the revenue for themselves. Innovative companies like aiMatch are helping to revolutionize this effort.

Private exchanges are going to enable publishers to place their entire premium inventory into biddable buckets, and let their advertisers have “seats” that enable them to get access.

Ultimately, certain publishers will have upfront markets, in which the most premium inventory is sold for holiday times—and an active “spot market” in which the remainder of their premium inventory is sold at prices that exceed variable floor prices.

Publishers will employ trading desk operatives that control the inventory they place in all exchanges (remnant and private), and employ fewer salespeople to hold the biggest clients’ hands. RTB is simply not about making cheap inventory better anymore. It’s about creating new market dynamics that raise the cost of the valuable inventory—and lessen the cost of sales.

Beyond display

So much energy in the Kawaja logo vomit map has been created by companies in the real time display space that I believe we, as an industry, are somewhat blind to the opportunities happening in real time elsewhere. Digital media marketing is about marrying best practices in display, search, affiliate marketing, mobile, and video to get results.

As branding becomes more measurable (thanks to Vizu, Aperture, and other technologies), more and more brand money is going to the digital pie.

It’s quite simple: brand money goes to where the eyeballs congregate, and they happen to be cast upon computer screens, mobile phones, and tablets as much as television and newspapers these days. However, putting all of that together is not easy for the modern digital marketer. Real time can help.

Real time buying systems are slowly migrating from pure display into multichannel media management systems that can find cost efficiencies across display, search, and mobile.

AppNexus recently released Windows Mobile inventory into its exchange, and Android browser inventory is sure to follow. Now, you can bid for eyeballs seamlessly in the same platform, without regard to where they may be focused on.

Enter programmatic buying technologies that can allocate spend across differing mediums (search display), buying methodologies (guaranteed, real-time), and pricing methodologies (CPM, CPC, CPA)—and suddenly you have real time systems that aren’t about “RTB” if you follow me.

They are about getting all of the combinatorial values of an effective media plan correct, using campaign attribute data—and historical performance and pricing data. The bottom line is that the machines are going to be making the allocation calls in the future, and we are going from real time bidding, to real-time media decisioning. That’s a big change.


Another interesting aspect (and perhaps the most important) of RTB is immediacy. Real time bidding systems are collapsing the time window between having a great marketing message, and your ability to distribute it quickly.

Twitter’s sponsored posts are one great example, Facebook’s self-serve ad interface gives instant satisfaction, and companies like DashBid are helping advertisers put their ads directly into the “hottest” video content, using bidding systems.

Now that content is being curated by end users even more than by publishers, marketers need the ability to access audiences quickly, as they follow the latest meme, news trend, or fashion.

Systems that offer the ability to go from idea to execution quickly, and are easily adaptable will win in this new RTB-driven ecosystem.

Chris O'Hara

Published 30 June, 2011 by Chris O'Hara

Chris O'Hara handles strategic accounts at Krux, and is and a contributor to Econsultancy

10 more posts from this author

Comments (7)

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RTB is a Quite Interesting Form of marketing. But This rapid growth has a danger of inflation lead..
More over small publishers never get a chance to compete with big companies in bidding ang get their ads to be published on top of site...

over 5 years ago



How does the publisher you had lunch with getting a $1700 eCPM scale that (or any publisher testing the private exchange waters)? By definition of supply & demand, it's not possible. I suppose they could leverage some of the audience extension solutions out there, but then you are back in the position of explaining that to an ad agency that only wants their ads running on "xyz.com". Would love to hear everyone's input on this.

over 5 years ago

Chris O'Hara

Chris O'Hara, VP, Strategic Accounts at Krux

JD -- I don't think the over-premium CPMs for publishers scale at all. In fact, I believe that RTB sales must be viewed as a limited part of an overall display monetization strategy that includes guaranteed premium sold by hand, managed private exchanges, and automatic remnant monetization technology (like AdMeld or PubMatic). RTB may be a reality, but the real deal is that advertisers want and need context for their ads to be effective.

over 5 years ago



Chris - Thanks for that, and I agree. Although I think we're in danger of over-complicating the media buying & yield management process (even more!) with human guaranteed buys, private exchanges, RTB exchanges, and possibly other players like vertical ad networks all trying to get a piece. The market is crying for a one stop shop solution. Oh wait, here comes Goog-meld to save the day!

over 5 years ago



Great post, Chris, really enjoying the content you've been putting out on the space lately. Interesting to hear your vision for the private marketplace landscape in particular - it makes sense that publishers would segment their best inventory and place it for auction in a controlled, invite only marketplace where they can manage channel conflict, but with all the various technologies at work, how will they know what is the most valuable? Also curious to hear more about what you mean by "biddable buckets" - does this mean you expect publishers to offer 1st party targeting options in and only in their private marketplaces, or something else.

Also, the top link in this post back to your blog goes to 404!

over 5 years ago

Chris O'Hara

Chris O'Hara, VP, Strategic Accounts at Krux

Thanks, Ben. Much appreciated. Publishers essentially know (from regitsration data, postal codes, content preferences, etc) who their best audiences are. A good technology partner can help them leverage that 1st party data, and put it into segments ("buckets" if you will) that can be bid upon. This is happening now...but with lots of 3rd party data on top of remnant inventory. Publishers are starting to work with premium inventory...trying to put audience and context together. Sorry about the bad link, by the way. Try: http://chrisohara.wordpress.com/wp-admin/post.php?post=649&action=edit

over 5 years ago


rtb media

Great post, internet user usually goes to financial websites to check on stocks and look up on Morning star ratings. He comes across a webpage that has real-time bidding for advertisements.

over 4 years ago

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