Ben Barokas, GM marketplace development, Google, USA, will discuss how ad exchanges and real-time bidding are affecting and enhancing the magazine media industry at the FIPP Congress on 23-25 September 2013 in Rome, Italy.
Here are some of his thoughts, pre-Congress.
Evolution vs revolution
Ad exchanges and online ‘real-time’ bidding (RTB) have become hot topics in the industry. This technology and service has been evolutionary vs. revolutionary. It has its beginnings in companies as diverse and old as advertising.com and was further developed in around 2006 with the advent of companies like Right Media. Real Time Bidding was the quantum leap that Admeld and others jumped on to in 2008 and then things really went to the next level.
There are so many different parts of the equation today (see the infamous Lumascapes here: www.lumapartners.com/resource-center/lumascapes-2) which gives a good indication to just how many!
What’s important is to understand what technology and services are being provided upfront. It always makes sense to make an informed decision, and check with like-minded publishers to understand the services and revenue provided. That said most of the big players including Google have a very well defined set of technologies and services that you can trust.
Ad exchanges do provide advantages over conventional ad placements, but it’s all about operational efficiency. In the old days there were so many steps to getting a digital campaign live. With programmatic buying (whether exchange based or not) there are much fewer steps, which reduces overhead and increases margin. Additionally, with the exchange, because of the auction-based model, you pay the optimal price for each piece of inventory.
Do media buyers and advertisers have less control on the placement of their advertisements? That may have been the case a couple of years ago. Much of the new functionality released over the past few years have been in direct response to those suggestions. There is now a lot of granular control on both the demand and supply side. The innovations of the future will continue to provide additional control and transparency to offer more complex types of transactions.
Will electronic media buying become the norm? The buying of media programmatically is going to continue to transform the media business in all forms. From Display and Mobile to Video and Outdoor to Broadcast – more integrated, intelligent and connected systems will increasingly become the norm. Though not complete for some years yet, we have seen a large increase in the proportion of total display budgets moving to programmatic in the past three years alone.
There has been a lot of discussion around the size of the market. Forrester recently predicted that by 2017, programmatic will account for 30 per cent of all display expenditure. According to a recent eMarketer study, in two years ~25 per cent of US display spending, roughly US$6bn, will be done through RTB. IDC says the number is about US$7bn. But, we think these numbers are conservative and are looking forward.