Real-time bidding inventory grew only 1% from Q1 to Q2 this year, but most of that growth came from mobile, according to Media Experts‘ quarterly report on RTB in Canada.
After a dramatic uptick in real-time bidding inventory last year – thanks largely to the formation of the Canadian Premium Audience Exchange (CPAX) – RTB growth in Canada has slowed considerably. Exchange inventory has grown only 27% since Q2 2012, lagging far behind global inventory, which nearly tripled in size in the same period.
Karel Wegert, Media Experts’ vice-president of digital solutions, said the common view that Canadian RTB is “skyrocketing” is mistaken.
“The impressions that are available on the exchanges in the Canadian marketplace have actually flattened out,” he said. “It kind of counteracts what the average advertising guy in the street will tell you about the RTB space.”
Growth is likely slowing because Canada’s largest publishers have already joined exchanges, and there aren’t any big players left who could drive a major inventory spike. Growth in Canadian impressions served by U.S. publishers has also cooled off as that market becomes saturated.
But for mobile, it’s a different story. Mobile RTB inventory grew 52% over Q1, which Wegert said is driving what little growth the RTB market has seen. Still, mobile hasn’t had the dramatic impact on growth that it’s had in other spaces, such as search. “That probably has a lot to do with technology. Ad serving into mobile is still kind of spotty, and cookie-based tracking is also difficult in the mobile space,” Wegert said. “I think as technology improves, we’re going to see that percentage [of total inventory growth attributed to mobile] get a lot better.”
The report, which covers the three months ended June 30, breaks out programmatic activity in Canada by province for the first time. It also includes a spotlight on media strategies to help market participants deliver better results and an update on RTB in the mobile market, where tablet is king.
By the numbers
• Global RTB inventory growth by volume (over Q1) — +98%
• Canadian RTB inventory growth by volume (over Q1) — +1%
• Canadian mobile RTB inventory growth by volume (over Q1) — +52%
• Global RTB inventory growth by volume (over Q2 2012) — +98%
• Canadian RTB inventory growth by volume (over Q2 2012) — +1%
Buyers are more selective about inventory
Prices on inventory have gone up, suggesting RTB is moving from a stage of rapid growth to market maturity. Though CPMs still haven’t recovered from the flood of inventory added when CPAX launched (the Q2 average is 13% less than last year), the average rose 5% over Q1 during a period of stagnant growth. Wegert said rising CPMs show more buyers are getting into the RTB market, and they’re bidding in more sophisticated ways, rather than buying large quantities of lowest-price inventory.
Some of the quarter-over-quarter activity in CPMs likely comes from seasonality – the report suggests that CPMs on inventory in home, auto and finance are up more than CPMs in news and technology, reflecting seasonal patterns in home and car purchasing.
But the a cost-per-action analysis also confirmed that higher-priced ads offer more cost-efficiency than lower-priced ads, which may indicate buyers are turning toward premium inventory. The report found that buyers who bid on a small quantity of premium inventory, rather than a large quantity of low-CPM inventory, ended up spending less overall for a higher rate of desired customer actions (like subscribing to a newsletter, buying a product, or engaging with content). The most valuable inventory fell into a $6-$8 CPM sweet spot, after which cost-efficiency started to diminish.
Wegert said that while many buyers see exchanges as a wholesaler of low-quality “remnant” inventory, a more cost-effective strategy may be to buy small volumes of higher quality inventory. And as demand for premium ads grows, average CPMs will continue to rise.
By the numbers
• Canadian average CPM increase (over Q1) — +5%
• Canadian average CPM decline (over Q2 2012) — -13%
Transparency is still a challenge
Programmatic skeptics often point to the challenge buyers face in knowing where their ads will end up. Slightly fewer exchange impressions are being identified as above- or below-the-fold than in Q2 2012, but Wegert said this likely reflects the falling popularity of fold-position as a measure of the value for digital inventory. “If an ad is marked as above-the-fold, that still doesn’t mean 100% that it will be viewed,” he said. “For those publishers that are no longer releasing that information, the assumption would be that they weren’t getting any incremental value from providing that information.”
Transparency is still a difficult issue in RTB, he said, because most tools to measure viewability are retroactive. For example, comScore or Spider.io viewability scores can’t be listed on an exchange the way fold-positioning can. Wegert says publishers in the RTB marketplace will eventually need to adopt a better standard for viewability, but he doesn’t see that happening anytime soon. For now, buyers that want to know who’s viewing their ads have to use forensic analysis to evaluate purchased inventory and use that knowledge when making repeat buys.
By the numbers
• Fold position (Q2 2012) — 21% below the fold, 24% above the fold, 55% did not disclose
• Fold position (Q2 2013) — 24% below the fold, 17% above the fold, 59% did not disclose
Note: Statistics sourced from XPETO Q2 (Media Experts) and RTB Key Canadian Market Indices compiled by Accordant Media. The full report can be downloaded from Media Experts in English or in French.
