RTB: The revolution in online marketing?
On 19 October, 2009, Mike Baker published his oft-quoted column on ClickZ about how real-time bidding would bring forth a revolution in the interactive media industry. In the opening graf, Baker says:
During my career in the interactive media industry, I’ve been lucky enough to help lead companies on the leading edge of many significant innovations, from behavioral targeting to mobile advertising. None of these developments, however, had the potential to be so fundamentally transformative for the industry as real-time bidding (“RTB” for short) for display media.
So one year later, what does RTB have to show for itself in terms of revolution?
A quick look at some recent industry news and commentary reveals no shortage of RTB chatter. These are just a few examples.
At the IAB’s MIXX Conference in New York in September, Google outlined their view of the future of the display market in a presentation called Display 2015: Smart and Sexy. In this presentation they predicted that by 2015, more than 50 percent of display ads will be bought using RTB to reach targeted audiences.
Earlier this month, Pubmatic hosted their 3rd annual premium publisher conference, Ad Revenue 2010. As reported in AdExchanger, RTB was the talk of the town at this year’s conference, especially in light of the study unveiled by Pubmatic and partners (available for download as of this week) which offered some startling statistics about the impact of RTB on CPM values. Here are some of the highlights from the press release:
- Publishers generated significantly higher revenue from RTB campaigns in comparison to Non-RTB campaigns, across all advertising verticals, by an average of 64%
- RTB outperformed traditional run-of-network non-RTB media buying methods by an average of 749%
- Audience targeted non-RTB campaigns outperformed run-of-network Non-RTB campaigns by an average of 324%
- Based on cost-per-success metric as outlined by the advertisers for each campaign, RTB provided better ROI than non-RTB audience targeted campaigns by 101% on average
In 2010 alone, we have seen countless investments into and M&A activities revolving around RTB from industry players big and small. For example:
- Google acquisition of Invite Media
- Yahoo acquisition of Dapper
- Admeld closes $15 million in Series C funding
- AppNexus closes $50 million in Series C funding
Last but (in our mind) certainly not least, our own company is an example the global spread of RTB. At the recent ExchangeWire Ad Trading Summit, Admeld co-founder and Chief Revenue Officer Ben Barokas gave a presentation about the “evolution of the European sell-side.” On slide 17 he shows the state of Admeld’s RTB in the EU. He notes that Admeld’s RTB is growing faster in the EU right now than in the U.S.
With all of these impacts in mind, we are proud to be one of the first European demand-side vendors to bring the opportunity to join in the RTB revolution to advertisers in Europe.
Clearly RTB is already disrupting the industry, and we look forward to the watching the impact of RTB grow even more in 2011.