Today's participant is Andrew Pancer, Chief Operating Officer of Media6Degrees, a social targeting, advertising company. He recently answered the following question in a conversation with AdExchanger.com beginning with...
AdExchanger.com: What aren't publishers getting about real-time bidding (RTB) today?
AP: Publishers think that RTB is deteriorating their revenue streams. In reality, with the right focus and strategy, RTB can be a very effective way to increase yield as well as gain valuable insights to help influence direct sales strategies.
The market for display advertising is bifurcated today. There are direct response campaigns and branding campaigns, and clients plan for them in very different ways. Ad networks and publishers are expected to deliver results using different objectives for each.
Publishers have amazing tools at their disposal for attracting marketers, including video, mobile, rich media, sponsorships, site sessions and takeovers. Many also have the capability to marry online and offline integration into a compelling package. These are the things that make their offerings special and unique.
Some publishers object to RTB with the following argument: "If I put my unsold inventory into the exchange, there will be channel conflict. Agencies will not buy my site direct because they will be able to purchase my inventory for a lower CPM in the exchange."
The fact is, these clients are buying in the exchanges now and they will continue to do so. Their strategic objectives with audience buying are quite different from their goals in buying direct from publishers. Audience buying is by definition not contextually-focused. Clean, well-lit environments are important, but context becomes a secondary consideration. Exchange buys work best for direct response efforts or large reach branding campaigns that any one publisher most likely cannot deliver against.
Instead of fighting against RTB, publishers should manage their relationship with it. Not only can they extract increasingly high CPMs, they can also access information from the data flow that can improve their own sales strategies. The concept of “data leakage” has been discussed at length. Why should networks be the only ones gaining value from data? There is a world of useful information publishers can access from their exchange partners. Ad targeting companies are starting to offer publishers unique insights gained through RTB that can augment their direct-selling efforts in some unique ways. They should start demanding this additional layer of value. RTB will start to look a lot less scary once they do.