“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Chris Tuleya, Vice President of eDR at Underscore Marketing.
Just a few years ago, digital agencies had to spend a significant part of their day convincing traditional-minded clients that digital display was an effective marketing tool. Since then, real-time bidding display spending has experienced phenomenal growth: RTB budgets grew more than 98% in 2012 to almost $2 billion, and eMarketer predicts this growth will continue through 2017.
The continued growth, though, is not a sure thing. In my opinion, the primary variable that will determine whether RTB will keep growing or not will be advertiser comprehension. Can digital agencies show the value of this rapidly growing method of display buying to a growing number of clients?
In the beginning, this was relatively easy. Digital agencies mainly focused on big names such as Aol, Yahoo, and MSN. For clients comfortable with buying traditional media, these sites were the ABC, NBC and CBS of the digital world, and they received a disproportionately large slice of digital ad budgets simply because they offered digital opportunity at scale. The Big Three dominated display advertising long before Google came along to reinvent search and experience its own growing pains.
Focusing on the Big Three was effective at helping tentative clients enter the digital media world at a time when getting approval for online budgets was an arduous task. But the demand far outweighed the supply on these top portals, and advertisers quickly began to seek out new opportunities.
Some spending ended up in the hands of second-tier content sites, but the real opportunity to scale came from networks. In many cases, these ad-inventory aggregators began to win a significant share of digital media investments. Now digital-agency folks had another task: educating clients about who these networks were, how they were different from one another, and what roles they could play within a media plan.
The fragmented digital landscape significantly compounded the challenge of advertiser education. More partners meant more agency resources to optimize and maintain campaigns, which led to increased management costs for clients. In turn, justifying those increased costs required more education to help clients understand the levels of work involved in the campaign planning, buying and maintenance processes. That’s not an easy discussion when many of clients’ expectations are aligned with traditional TV or print buying.
Nonetheless, our work educating advertisers isn’t done. If we want to continue to grow adoption, we must invest further in teaching advertisers how inventory is purchased programmatically, the value of RTB inventory and its role within the larger marketing landscape.
For agencies, purchasing inventory from an RTB platform can offer many benefits – potentially making ad buying less labor intensive and offering increased control to help optimize your investment and better meet client goals – but it only makes sense if you understand how to maximize the opportunity and communicate the potential downsides to clients.
As with any hands-on platform, human monitoring and optimization can be fruitful but also time-consuming. It’s easy to consolidate dollars with networks and portals to save on campaign maintenance costs and avoid uncomfortable conversations about agency fees as a percentage of media budgets. But avoiding the discussion doesn’t do our clients justice.
The most important things for advertisers to understand about RTB are “what” and “why.” The “what” is the more challenging question to answer; clients are rarely immersed in the technology we vet on a daily basis, and most clients don’t have the time – or desire – to absorb all the minute details about how digital media is bought and sold.
But for clients to understand the value of RTB – the “why” – they do need to have a baseline level of knowledge about how it used to be done versus how it can be done today. Spreading that knowledge, then, is integral to RTB’s continued growth.