For companies that use public cloud services alone to transmit bids, performance can lag, especially during periods of high volume traffic. This is comparative to the "buffering" effect in streaming media over a device running on WiFi, Blackburn claimed.
Similarly, the ability to facilitate a bid exchange can be stymied by these latency or performance issues. Given that RTB display spend is expected to grow from $3.4 billion to $8.5 billion by 2017, according to eMarketer, the stakes are high.
Equinix fields a platform called Ad-IX – which currently has 88 exchange partners plugged in. The platform is designed to enable a high-performance interconnection between companies in the RTB ecosystem and their exchange partners.
Blackburn describes one mobile ad exchange that only completed 1.3 out of 1.8 billion bids in a day. About 500 million “don’t make it back within the [accepted] window of time, which was right in line with what we witnessed with Rocket Fuel and BrightRoll.”
He pointed to a study in which Rocket Fuel, “a very advanced bidder,” found a third of bidded ads weren’t arriving on time.
A number of exchange-based companies are solving this by essentially "bypassing the use of an Internet [cloud] service provider and have their computers talk to each other directly,” Blackburn said.
“A lot of companies are using a public cloud service or hosting provider, and they are the ones that are having to look at making additional investments in private cloud to reach maximize performance," he said. "We’re seeing the emergence of a ‘hybrid’ cloud model, [which combines private and public cloud services], which is not only happening in RTB but in other segments as well.”