RTB: Learning in real time

In anticipation of Tuesday’s Real-time Bidding Executive Spotlight, here’s a sneak peek at some of our exclusive RTB research So much hype. So much confusion. So much left to learn. Let’s begin with a definition, courtesy of the IAB: “Real time bidding: A data-driven programmatic buying model allowing advertisers of their agencies to bid on […]

In anticipation of Tuesday’s Real-time Bidding Executive Spotlight, here’s a sneak peek at some of our exclusive RTB research

So much hype. So much confusion. So much left to learn.

Let’s begin with a definition, courtesy of the IAB: “Real time bidding: A data-driven programmatic buying model allowing advertisers of their agencies to bid on digital media (display, video, mobile, social, etc.) in real-time, at the impression level.”

Without question, it has been one of the hottest topics to hit the digital media world in some time. Using technology to automate the digital ad buying process has a simple allure—new efficiencies, highly targeted ads to highly qualified audiences. But the reality is much more complicated.

A recent survey conducted by Rogers Connect Market Research for Marketing and partners TubeMogul and CPAX shows there is a great deal of confusion in the market and a large divide between the hype and the number of professionals in Canada actually using RTB.

The researched polled 422 people working in digital marketing in Canada about real-time bidding. From a list of digital tools used to achieve client-branding objectives, just 13% said they are using RTB.

Asked to rate how knowledgeable they are about RTB on a scale of one to 10, just 6% said they were “very familiar” and 1% said they were “experts.” Nearly three-quarters said they are “unfamiliar.”

It’s not really that surprising most people in the industry still don’t have a firm grasp of it, says Corby Fine, senior director and general manager, audience solutions and business development at Rogers Media, which is part of CPAX. “Because it’s actually a lot more complicated than the traditional process.”

In the old days—like way back in 2008—the digital media buying process was fairly simple: an advertiser would give an agency a budget, an agency would put out an RFP to its contacts, and a direct placement would be made.

“There is now a new ecosystem of service providers, technology platforms ranging from exchanges, DSPs, data providers, optimization tools, etc. that dis-intermediate that process and the agencies that used to simply pick up the phone and call their publisher partners now don’t have a roadmap to navigate the complexity of that ecosystem,” says Fine.

“There’s a lot of components to RTB,” adds Grant le Riche, managing director of TubeMogul Canada. “It’s not surprising that education is low, however the influx of new players should change that. RTB actually simplifies the media buying process and gives more tools to marketers. That value is too good to be ignored.”

The slow rate at which marketers have embraced RTB is in direct contrast to the activity in the space. Things have moved fast and an entirely new lexicon has formed in the past few years. In a matter of just 18 months, new players poured onto the media buying and selling field in Canada, building the infrastructure for a robust real-time bidding system.

CPAX launched less than a year ago through a partnership between CBC/Radio-Canada, Shaw Media and Rogers Media to form a premium online ad exchange. That partnership was later expanded with the additions of Corus, Astral, Cineplex, V and Tele-Quebec. “Premium” is the word that CPAX and other private exchanges use to differentiate themselves from those first RTB offerings delivered by ad networks. All of the sites in are owned by the partners, meaning a guarantee on quality and no questionable content or fake sites artificially inflating impressions.

Similarly, California-based TubeMogul launched its real-time video buying platform in Canada only eight months ago. Le Riche was the lone employee until December, but the office has grown to eight now and should hit 20 by the end of the year. “It’s growing tremendously,” he says.

But with things happening so fast, it’s inevitable that confusion will result. Indeed, in the past few months, “programmatic buying” has become preferred to RTB for a growing number of professionals in the space.

“Programmatic is a broader term that essentially means using technology to facilitate the transaction as opposed to people facilitating the transaction,” says Fine. In other words, RTB is a subset of programmatic.

And yet, while 13% of survey respondents say they are using RTB, just 9% say they are using programmatic buying. RTB is, by definition, programmatic buying, so at least 13% of people are using programmatic buying though they may not know it or don’t use the term.

“Some marketers don’t actually know they’re using RTB,” adds le Riche, referring to the many media suppliers using RTB platforms like Tubemogul created to make the process easier.
Naturally, as two professionals working in the RTB and programmatic space, both Fine and le Riche make a strong case for the model.

“What real-time bidding does is give the marketer way more control over what they are buying, increased granularity, way more transparency into where they are being placed,” says le Riche. “It improves the workplace, cutting out the administrative work that makes up much of the media buying process. It also gives advertisers control as to where they run, with better pricing and more analytics offering marketers increased performance and insights.”

Fine, one of those who prefers the term “programmatic,” offers a useful hypothetical illustration.

“I will never know if a person has been to a Ford website; Ford will know that,” he says. “Ford will never know if the person is a mom, but I know that,” he says of the data CPAX can collect on visitors to the hundreds of websites owned by the partners.

“How do we work together to facilitate a programmatic buy that allows Ford to run a campaign for the Ford Flex that targets moms who drive seven kids to soccer? We have to put our heads together or, more importantly, put our data together. And programmatic is the facility by which that can happen because people can’t read cookies on machines, machines can read machines,” he says. “There is a great opportunity in creating broader and deeper partnerships between first-party data sets that involve the audience insights a publisher owns on one hand and the information a branding advertiser knows about its buyers and consumers on the other. That is the sexy part.”

The upside of coming to the game a little later and a little more gradually, however, is learning from others’ lessons. In the early days of RTB in the U.S., the perception, that still exists in the minds of some experts, was that RTB was best suited to direct response and performance campaigns.

“Those who are more advanced in their knowledge of RTB quickly realize that it’s not just about performance. It’s actually applicable to all types of campaigns,” says Fine.

Here, too, the numbers from the survey are revealing. Asked if they agree with the statement “RTB is valuable for direct response advertising,” 79% said they did. For the statement “RTB is valuable for brand advertisers,” there was 70% agreement. Obviously more still believe RTB is about direct than brand, but the difference is not great.

“I guess being a bit behind the U.S. has helped because of the knowledge and learning adopted from the U.S.,” says Fine.

There’s more! Marketing conducted a small, informal survey among RTB experts in the U.S. and Asia to add some global perspective to its Canadian coverage. To read their expert opinions, and get more info from our exclusive research study, check out the April 22 issue of Marketing (available on the iPad). Subscribe today.

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