Real Time Bidding at Scale: the Promise of 2015

2014 was the year Real Time Bidding truly took off. A subset of programmatic, RTB was met with suspicion on both sides of the ecosystem. Although at first advertisers were afraid of it, and publishers thought it would drive eCPMs through the floor, it turns out this hasn’t happened. In fact, the opposite may be happening as targeting gets better and online ROI grows along with it. Publishers who know their audiences and use their audience data can offer it to eager advertisers at higher CPMs.

RTB is probably the biggest advance in online advertising in years, because it puts power in the hands of advertisers, the people who are paying the bills. However, it also helps publishers. Handled by people who know how to buy media, RTB can finally provide brands the answer to the question John Wanamaker first asked: “which of my advertising dollars is wasted?”

That’s because, for the first time, advertisers can buy individuals rather than buying audiences in bunches like grapes, according the Mike Smith, author of the new book “Targeted,”  a primer of online advertising.

Smith points out that RTB radically changes the old audience aggregation paradigm. Advertisers can now decide which individuals suit them, and despite the fact that RTB means everything happens within split seconds, an advertiser still has the opportunity to choose individuals. In real time bidding, the advertisers make their own decisions, instead of relying on agencies or even networks. They can also choose how much to pay for each impression separately. In theory, this makes for a more transparent process.

Smith compares RTB to the music industry, in which it is no longer necessary to buy entire albums after iTunes made it possible to buy just a single cut out of an album. The aggregated audience is analogous to the advertiser’s play list. However, to create that play list takes time, and it takes the cooperation of both publishers and advertisers, who may have different data about the same customer. Most advertisers  have lots of customer data, but they don’t often mine it properly. They began by outsourcing their data management, but increasingly they are taking  data management in house and building their own DMPs, because with RTB they can use the viewing and shopping behavior of their own customers to determine their optimal audience.

Buying individual impressions rather than aggregated audiences is a massive shift.

The only remaining problem is how to buy them at scale, and that’s where a network like the ZEDO premium publisher network comes in. We can take an ad buy that comes in through our ZINCbyZEDO high impact formats division and produce scale for the advertiser through our network.  We can offer advertisers news, sports, travel, and other custom segments as we continue to grow our publisher network. And we can do this through a private exchange, which is an even more desirable way to buy.

We’re predicting a profitable year for our premium publishers as our ZINC team hits the ground running on the advertiser side.