Notice: This blog is no longer updated. You may find a broken link or two

You can follow my new adventures @mikeonwine

RTB Part II: Supply supply supply!

September 19th, 2009

Please check out my last post on RTB first. Since this last post, a pretty big announcements has hit the wire. Namely, Google has announced Ad Exchange 2.0. Most significantly:

One of the platform’s key features is the ability for ad networks and agency buyers to bid on inventory in real-time, letting them zero in on impression attributes such as geographic location or the presence of advertiser cookies before placing a bid. Yahoo’s Right Media ad exchange does not currently offer bidding in real-time, though it is available through some smaller ad marketplaces.

That’s right folks — Google’s real time exchange is coming. In this post we’ll talk about who is jumping on the RTB band-wagon on the supply side, and some implications this is going to have on the industry.

Ok Who’s In

Ok, so Google is doing it? Who else? Over the past few months pretty much any aggregator of supply has launched, announced or started work on some sort of RTB capability. All major exchanges — Yahoo’s Right Media, Microsoft’s AdECN and Google’s AdEx have RTB integrations in the works. Of the pub aggregators, AdMeld & PubMatic are live and Rubicon is actively working on a solution. As mentioned, FAN has been live with Myspace inventory for a while and there are a number of other parties, such as ContextWeb, AdBrite and OpenX, entering the space. The short summary is, over the next 12 months we can expect billions of daily impressions hitting hundreds of millions of unique users to become available RTB.

Death of the Traditional Ad Network

This is going to have huge implications for the display advertising space — primarily, the traditional ad-network model is on it’s last legs. Most traditional ad-networks today thrive because they have large business development teams that have developed deep relationships with supply. Ad.com, Specific Media & ValueClick all have large publisher bases that they rep to agencies. This posed a large difficult hurdle for new networks to overcome and effectively created a catch-22 for any new network entering the space. To get media dollars a network needs reach, but to get publisher deals a network needs media dollars.

This all changes when there are billions of biddable impressions out there. In this new world, any new network has instant access to the reach that historically would take years to build up. Now anybody can walk into an agency and claim to have a reach of over 100 million unique users.

Now of course this isn’t totally new. Right Media opening up Yahoo inventory to the world back in 2007 started this process and a number of companies have managed to start very succesful network (or “exchange desk”) businesses on this platform. AdECN, AdEx, Admeld, PubMatic and Rubicon take this to a new level as this opens up MSN, the DFP publisher base and the majority of the Comscore 1000 list!

Can Technology Finally Win?

I’ve written in the past about the plight of the ad-technology startup. The short summary is this — technology is great, but the lions share of revenue today comes from media not tech.

As access to inventory becomes commodity marketers and brands will inevitably start focusing on results over the ability to simply spend the budget. With everyone on an even playing field it’ll be easy for a marketer to compare the results from one buying network to the next — which means technology will finally matter.

There are already a number of successful technology focused startups who focus on exchange buying — and a couple that are simply building cross-exchange buying tools. Expect this to become the next hot space for startups in the advertising world.

Behavior behavior behavior!

The traditional problem with behavioral buying, whether remarketing or using third party data provided by companies like IXI, Exelate or Blue Kai, has always been reach. We all know that remarketing works wonders and has amazing ROI, but unless you can actually find your users on the web it’s hard to spend a significant amount of money this way.

With billions of impressions that of course changes — the probability of finding a user across the many RTB platforms becomes easier and easier and hence the actual required reach of any given behavioral segment becomes smaller and smaller. This in itself is going to make data-focused businesses more feasible and also open up a world of possibilities of highly targeted and focused media-campaigns and very granular behaviors.

Next Up

Ok, enough RTB for the day. Next up –> demand demand demand! Who are the new players that are taking advantage of this new RTB revolution and innovating both from a business model & technology perspective.

Related Posts:


Posted by Mike Filed in Uncategorized
13 Comments »