The Truth About RTB: Expert’s View
Econsultancy wanted to clear up some confusion around RTB, we were one of four marketers they asked to find out our opinion, the advantage of making it part of your spend and how it will affect the future of marketing.
1) What are the most significant benefits of real-time bidding? How important are data management platforms to this?
Ari Paparo, SVP Product Management, AppNexus: Real Time Bidding allows buyers to access the media they want based on their own data, and theoretically with little waste. Data is a key part to this, and currently a large portion of RTB spend is based around strategies utilizing data.
The term “DMP” or “Data management platform” means different things to different people, so it can be hard to generalize. It is certainly the case that buyers need to be smarter about the way they collect and analyze data in the RTB environment, and there are lots of great tools out there to do that.
Paul Cimino, CEO, Brilig: RTB allows markers to apply data algorithmically. This is similar in nature to SEM, except it can be much more brand/campaign specific. Audience algo RTB (ARTB J) will perform much better (higher spend ROI) than plain old media-based RTB. We should expect targeted RTB direct response to get similar response rates to direct mail (1.4% engagement). DMPs are currently just a fancy name for cookie data warehousing but they will become the nurseries of these brand algos.
Jerry Sandoval, SVP, LiveIntent: The main benefit of RTB is the ability to learn, optimize, and change a campaign instantaneously. Rather than purchasing a campaign directly from a publisher or network using a huge bulk budget and wide targeting parameters, RTB allows a buyer to pick and choose impressions as they come in.
A purchaser can allocate budget as the campaign progresses to the best performers and not wait until a campaign ends to get actionable learnings. DMPs can enhance the RTB experience by bringing in additional sources of targeting and optimization. A DMP can help manage performance across all segments purchased, target first-party data, and assist the buyer through their optimized and manual purchases.
Jeremy Kagan, CEO, Pricing Engine: RTB allows advertisers to buy audiences rather than simply inventory. It also allows realistic price discovery on a more granular level instead of a more broad based average pricing as seen in the traditional CPM model – a sort of summary of audience quality. Rather, each impression is bought individually.
This forces a focus on performance rather than the brand of the publisher – which can reward publishers with high quality, responsive audiences, but penalize those with large but indifferent audiences. Data is the key as without accurate and timely information. rules based bidding isn’t possible. (This means not just audience data – without accurate performance data downstream, advertisers won’t be able to bid effectively.