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Upcoming trends in real-time bidding

Upcoming trends in real-time bidding Chris O'Hara

For years, publishers have devalued their inventory by letting a daisy chain of remnant inventory networks and exchanges leverage their audiences. Because every publisher was willing to place ads on every single page, sheer scale created the opportunity for third parties to extract value by adding the splash of data that changed CPMs from pennies into dollars. As third-party data shrinks, the opportunity for publishers to profit from partnering with technology and data companies also decreases. The near ubiquity of real-time bidding (RTB) also creates many new and exciting opportunities for publishers to package and sell both their higher value inventory and audiences. Here are three tactics critical for succeeding in the post-legislation era:

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Change the bids
Although real-time bidding has gone from obscure, future-facing media theory to being part of the ongoing media conversation, demand-side players still put RTB in the same bucket as remnant networks. When inventory is being traded in a true exchange that is agnostic with regard to pricing, it is assumed that some inventory will be priced high, and some low. Today, the preponderance of inventory available in both private and public exchanges is composed of the same low-value impressions that most networks offer. This will change. Once supply-side players start selling their high-value inventory inside exchanges, the game changes. Soon, private, exchange-based marketplaces will crop up to connect prime demand-side customers with the best available inventory. This will be the future of RTB.

Own the data
Given the coming legislative tsunami, there will likely be severe shrinkage in the cookie pool, leading to a decline in targetable audiences. Consumers will have to opt into targeting -- or have easy access to browser-based tools that give them the freedom to opt out more easily. Either way, it seems apparent that cookie-addressable audiences will decline. For publishers, this may be the greatest thing that ever happened. So, at what point did publishers decide to let third-party technology companies know more about their audiences than they did? While that may be somewhat of an exaggeration, I think the successful modern publisher must have a strategy for targeting its own inventory using first-party data.

Stop the madness
Many publishers realize they have an inventory management problem. Like addicts, they know exactly what their problem is doing to their lives, but when confronted by the source of their addiction, they easily crumble. For digital publishers, the drug is called remnant inventory, and monthly checks from network and exchange enablers keep the ads flowing. Back in the old days of print publishing, we understood that ads didn't have to appear on every single page. The expensive ones were in the front, and the cheap ones (i.e., the classifieds) were all crammed in the back. This is not a bad strategy. But, I wonder who decided that every single page on the internet had to have three standard IAB-sized ads on it. Maybe the time has come to end "value-added" impressions, and to cut back the number of remnant ads available on a site. But that day won't come for a while, which is why companies like Rubicon, AdMeld, and PubMatic exist.

With RTB becoming more ubiquitous, more than just remnant inventory will be bought and sold on a bidded basis. For publishers, the challenges will include figuring out how to squeeze every penny out of the cheapest inventory with remnant optimizers, as well as managing the declining availability of targetable inventory (based on third-party data availability). In addition, publishers will have to balance the decline in remnant revenue with the rise in bidded high-value inventory. How much of your premium audience will you make available in real time to your existing and new advertisers in open exchanges? Getting that mix correct will make some publishers (and private publisher inventory pools) extremely profitable -- and kill other publishers altogether.

Chris O'Hara is SVP of sales and marketing for TRAFFIQ.

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Chris O’Hara is a recognized a domain expert on platform technology, with an emphasis on digital advertising workflow, data management, and real-time bidding. Prior to Krux, ne was co-Founder and CRO of Bionic Advertising Systems. He has led...

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