At least half of all targeted ads will be bought using real-time bidding technologies within five years, predicted Neal Mohan, Google's VP of product management at the Mixx Conference in New York. That has been Google's experience with DoubleClick, which has seen its real-time advertising triple in the past year.
Particularly hated by privacy advocates, real-time bidding lets advertisers target audiences by individual impressions via auctions. Advertisers get access to consumers based on their web history thus allowing them to show relevant ads based on their history. Right now only a miniscule percentage of ads are sold this way, but that is rapidly changing.
AdSafe, for instance, recently observed that premium brand advertisers appear to be shifting a larger percentage of their display adverting spending to ad-exchanges, real-time-bidding platforms and demand side platforms - advertisers that had previously acquired media primarily through direct publisher sales. But is that "shift" sharp enough to result in 50% of all targeted ads being sold on these platforms? It might very well be.
Consider the following:
RTB Offers an Excellent ROI Story. Improve Digital co-founder and COO Janneke Niessen cites research by Turn that shows click-through rates improving by up to 135%, conversion rates up 150% and cost per action up 145% when compared to non-real- time inventory. (via New Media Age). Other data she points to is provided by comScore, which reported a 106% increase in overall CPM over six months by using real-time bidding. And Forrester Consulting found that an insurance company decreased its online cost per lead from $200 to $100.
Money is Being Invested in the Technology - And Not Just By Google. Earlier this summer, Google acquired Invite Media, a company that has developed a system for real-time bidding on display ad space. But other examples show the technology is attracting investors. AdMeld closed on a $15 million round of venture funding. AdSafe raised $7.5 million. Meanwhile other companies are offering RTB - namely Yahoo, which began making its inventory accessible to advertisers on a real time basis in March (via ClickZ).
Enter the Partnerships. Niche providers of services are incorporating elements of RTB in their own platforms via partnerships. Sociocast, has partnered with BackType, OpenAmplify and RapLeaf to launch of a private beta dashboard that real-time insights and measurement to help editorial and direct sales teams monetize audiences. TidalTV, partnered with LiveRail's real-time inventory bidding tool, to enhance its services. LucidMedia has partnered with Click Forensics to improve traffic quality across real-time bid markets for interactive advertising agencies using LucidMedia DSP.
