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Stop confusing real-time bidding with programmatic

Stop confusing real-time bidding with programmatic Will Doherty

The digital ad industry is incredibly myopic. In the past year or so, the industry adopted the term programmatic to describe how technology has permanently changed media buying. Prior to that, the latest and greatest ad tech advancement was real-time bidding (RTB) -- the trading of online media in an auction based environment. While the focus has shifted beyond RTB to the bigger picture of programmatic media buying, many are still guilty of using these terms interchangeably. RTB is not programmatic. The failure to distinguish the two could result in advertisers missing out on one of the biggest technological leaps in decades.

RTB is, in fact, a feature of programmatic -- a subset. When RTB emerged in the market, the key players quickly grasped what it meant and the smart ad tech companies built real-time bidders into their platforms. It did not end there. The industry came to realize that the technological advancement was not limited to an auction and frictionless buying was possible across a much greater spectrum.

RTB's key benefit is providing buyers with access to real-time inventory at scale -- at a price those buyers want to pay. Yet changes in media consumption left buyers wanting to target across devices, gain more flexibility, and transact directly with premium publishers. At that moment, private marketplaces were born. Nearly all online media buying and selling systems accommodate direct private relationships between buyers and sellers while maintaining the existing real-time pipes. This allows vast amounts of data and impressions to pass between buyer and seller without necessarily being part of the auction model. Programmatic methodology now surpasses the limitations of RTB.

Programmatic is automated buying, at a large scale, accomplished via a combination of machine-based transactions, data, and algorithms. The process is guided by a human element, with the end goal of centralizing data and generating meaningful intelligence that buyers or their agencies can act upon quickly. Programmatic can serve marketers that don't bid in real-time and also applies to disciplines outside of our digital media world. The strategy can be leveraged in out-of-home mall kiosks, billboards, and potentially (one day soon) TV. The market has already started moving in this direction, with pioneers such as Vistar Media saving marketers valuable time on tedious one-off media buys.

Brand marketers are faced with fragmented audiences looking for their desired content in multiple locations and across devices. These consumers expect on-demand content capabilities and have short attention spans. Marketers will increasingly need to rely on the cross-platform capabilities of programmatic to reach those consumers. The data used to target to these consumers can no longer be treated separately from the creative canvas that consumers engage with.

The industry needs to start thinking about the future opportunities of programmatic and not constrain itself to the already limited definition of RTB. In the same way RTB became a catch-all for display media buying, brands that are heavily reliant on engaging with their consumers will turn to programmatic solutions. It's now possible to have the same always-on marketing plan but to react to customer opinions and results automatically. Truly embracing programmatic -- and ceasing calling it RTB -- will create new types of relationships between buyers and sellers and unlock new possibilities to take collected data and make it actionable.

Will Doherty is the business development director at Netmining.

On Twitter? Follow iMedia Connection at @iMediaTweet.

"Concept of Confused way of a businessman" image via Shutterstock.

As Director of Business Development for Netmining, Will Doherty oversees Netmining’s strategic partnerships, contract negotiations, inventory and data acquisitions. He assists in the development of new products as well as general operations.

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to leave comments.

Commenter: Chris DeMartine

2013, August 16

Seems like, if we all take a step back and look at the big picture, RTB is really just a way for ad tech companies to maximize revenue like Google does from PPC? However, there is still approximately $6,000,000,000 in annual display spend bought DTP on a guaranteed basis (about 5 times the top line for the ecosystem that supports RTB).

So here's my question (from outside the walls of digital agency dynamics)... with all of the infrastructure already in place, especially the power of the data management and ad serving platforms for targeting and measurement, why hasn't one of the high-end DSPs figured out a way to make guaranteed buying programmatic?

I guess I'll wait and see what happens now that so much of the VC money is drying up.

Commenter: John Shomaker

2013, August 15

Will, in general, I agree with your premise. At AdJuggler, we make the point a slightly different way. Originally, RTB (and programmatic at that time) focused on 'spot buys' focused on remnant only. RTB and programmatic were discussed as a new 'channel'. As spot buys were complemented with private exchanges, the term programmatic expanded to include the machine management of previously manually-entered direct IOs (in some forms). As a result, programmatic symbolizes that machine-based buying is not just a remnant channel, but the underlying transaction model for all types of buys: n-buyers-to-n-sellers, n:1, 1:n, and even 1:1. It can be argued that, even in a 1:1 transaction, it's 'real time' (hence RTB), and it's probably being managed via server-to-server API connections (another attribute of RTB) versus the old school campaign tag alone.