In response to recent industry enthusiasm for Real Time Bidding (RTB), I feel it is important to look at the publisher’s point of view. Exchanges and real time bidding systems are popular because they allow an advertiser to pay just one cent more than the next highest paying advertiser. Is this a good thing? Advertisers use RTB to continually test lower bids and find the lowest accepted price. Clearly this is a great technology for advertisers.
However, Real Time Bidding can be bad for publishers if they don’t use it well. Take this example of a local advertiser who is happy to pay $4.00 CPM because he is getting a satisfactory cost per conversion. With the new RTB ability to vary bids, the advertiser may find that for some users the next highest bidder is paying $0.40 CPM. Now, the advertiser will only pay $0.41 CPM instead of $4.00 for those users. This is a 90% loss of revenue for publishers.
To benefit from this great new technology, publishers need an Advertising Technology company that is on their side. A good publisher technology allows publishers to prevent bidders or exchanges from knowing, or being able to derive, the price other advertisers are paying. The publisher technology should instead hold their private information close to their chest and set a minimum price. For example, a good technology allows the publisher to set a fair minimum CPM, of e.g. $5, for advertisers that are choosing valuable, locally targeted impressions. ZEDO, as a partner for publishers, is unique in offering this.