Every once in a while, it’s good to be reminded that the goal of a newspaper, although it may seem to be just delivering news to readers, is also to deliver readers to advertisers. Traditionally, content in newspapers has been subsidized by ad revenue, and for the past decade the way advertisers connect to their readers has been shifting — first from print to online, and now from search to display, and from “one price fits all” to real time auctions.
One of the newest trends, the rise of Real Time Bidding (RTB) in which inventory from publishers is sold by auction in real time, has begun to change how readers are delivered.
A user heads to a page on a publisher’s website, causing it to start loading. In the same instant the publisher sends out a ‘bid request’ to thousands of potential advertisers saying, “We’ve got this user who is 30, male and based in New Jersey, US, and in the past has searched for return air tickets to London, visiting a page on our site. How much are you willing to bid for being the only ad on this page?”
Within about 100 milliseconds the publisher ad server (like ZEDO) gets bids from different advertisers, which it then analyses to figure out the highest bidder. The winner is alerted by the publisher and allowed to place its ad on the page.
The remarkable thing about this entire process is how fast and how often it takes place. The entire series of to-and-fro communication between publisher and advertisers takes place in 300-500 milliseconds, causing no visible delay to the user.
The process is repeated for every ad on the page, and it connects the “right” reader with the “right” (targeted) ad.
In the US, IDC estimates that real time advertising will grow at a compounded rate of 71 per cent in the US until 2015 and end up being 27 per cent of the overall online ad spending. In Europe, growth is expected to be even faster — above 100% annually.
The prices that publishers receive from these auctions are not yet very exciting. But they will grow. The gating factor is how willing publishers are to spend on new technology. We think the publishers will realize that there’s more to online advertising than the old standard 3 ad sizes, and will begin to monetize their sites with innovative formats like our InView Formats, TVAds OnPage, and other eye-catchers. That inventory is more effective and in short supply. Therefore the auction will generate higher prices for publishers.
• ZEDO’s New InView Slider Runs on Any Ad Server (zedo.com)
• Internet Ads Can (and Will) be As Effective as TV (zedo.com)
• Publishers: Now You Can Monetize Below the Fold (zedo.com)