OPINION: Closing the buyer-seller divide with real time bidding

Jason Barnes
By Jason Barnes | 27 November 2012
Jason Barnes, head of commercial development at News Limited

We are on the cusp of major change in digital media advertising. The way inventory will be bought and sold is evolving, spearheaded by quality first party data at huge scale.

There are challenges though. The digital advertising journey from seller to buyer is inherently inefficient as a lot of major digital publishers have experienced. Moreover, the lack of sophisticated understanding of the medium and standardised measurement has held many back from investing in this space.

At its heart, understanding digital advertising is all about understanding the power data brings in reaching target audiences.

So how do you effectively apply data targeting capabilities with a large audience to execute a trade? Enter real time advertising trading, also known as real time bidding (RTB) or programmatic trading, a method of buying online advertising that utilises the power of data and allows advertisers to leverage sophisticated technology to buy online ad inventory through optimisation algorithms that better target audiences.

Already well established in the travel, e-commerce and ticketing industries, this technology has completely changed the way consumers interact with these services and facilitated their growth. We can expect similar outcomes in the digital advertising industry.

Programmatic trading has introduced a way that we can remove a lot of the complexity digital display advertising has traditionally been associated with. There are a number of players out there who have been doing this well and they are winning market share.

The ability to start targeting ads right down to an individual customer or single impression is highly valuable. When you can offer such low wastage for the advertiser their ROI will increase while the publisher’s value proposition improves too.

With ad-trading though, revenue and targeting shouldn’t be the only considerations. The combination of increased revenue, stronger targeting and ‘brand safe’ environments will give advertisers the best outcome so I advise that when ad-trading, you do so with a quality brand. In short: the potential of real-time bidding is huge.

In the US by 2015, it is expected that 27 per cent of online advertising revenue will come from real-time bidding.

In Australian SMI data shows that agencies are increasingly committing revenue to this channel with $50 million forecast this financial year off a very small base last year.

Digital marketers know that they can not be complacent to the opportunities digital technologies can bring in dissecting the scope of data available for advertisers. And similarly, advertisers must continue to realise and invest in the potential of digital advertising – in addition to banner ads, homepage buyouts and med-recs.

The advertisers who understand this and take a real advantage of the customer insights that data can bring will succeed.

Locally, real time bidding is becoming more accessible. On the buy-side, most major DSP’s now have a local presence so the agencies and advertisers have access to the most advanced technology available and can choose which best suits their needs.

On the supply side, the publishers are at varying stages of development with News leading the pack as far as the transparency and quality of inventory.

The opportunities are there. The technology is available. As a digital marketer, it’s now up to you to recognise the potential and power a clear understanding of available data can bring to effectively target your audience and ensure campaign success.

Jason Barnes
Head of Commercial Development
News Limited

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