Publishing is going digital, and so is your income. “There is a lot of disruption taking place in the publishing industry. It also means that digital will be a big part of your future,” Joelle Frijters, CEO and founder of Netherlands-based Improve Digital, a technology platform that enables publishers to build their own ad exchanges, told a session of the FIPP World Magazine Congress today in Rome dedicated to real time bidding (RTB). “The audience is becoming the currency,” said Andrea Silva, the head of partner business solutions at Google, Italy.
What is RTB (also known as automated buying)? When a user visits a website, an ad call is made via real time advertising technology. Hundreds of advertisers then bid on the visitor and only one winning ad ends up being served. It takes milliseconds for this technology to connect those searching for advertising space with those selling it.
“This is real, this is happening and this is absolutely relevant for you,” said Frijters. Research shows that by 2016, 50 per cent of digital ad revenue will be programmatic. Worldwide RTB spending is predicted to grow from US$1.9bn in 2011 to US$13.9bn in 2016. RTB share of advertising spending will grow from five to 20 per cent by the same year.
According to Frijters, this development in the world of advertising is quite in line with the larger trends in the digital world. Data is the new gold, automation is happening everywhere, the world has become “real-time” as readers consume information around the clock and all systems are getting more interconnected, thus allowing for greater integration. Programmatic advertising is a natural development under these circumstances.
This technology also allows for precise targeting, the use of incredible formats and meaningful measurements, all three of which are unique to the online medium. Programmatic trading is the means by which these three elements can co-exist and develop.
So why do advertisers love it? Firstly, RTB is very convenient for the buyers: it is fast and efficient, it gives them greater control and it delivers the right message at the right time to the right audience. In fact, in the United States, agencies are planning to spend 40 per cent of their digital ad budgets on programmatic buys in the next six months.
On the other hand, publishers should embrace RTB because they want a fair price for their audience and content while protecting their data and remaining in control of their relationships with the agencies and advertisers. It also allows for greater transparency and cost savings and creates long-term value for the supplier. “Programmatic buying is a key new way of buying and selling inventory because it simplifies the process and opens up new opportunities the publisher might not have considered before,” said Silva.
Publishers are presently faced with two options when it comes to monetising their ad inventory: Outsourcing the ad exchange to a third party vendor or owning their own, private ad exchange. Sanoma Media, for example, took the latter road a few years ago, and 35 per cent of the company’s display revenue in digital last year was derived from it. Only eight full time employees operate the network.
“The numbers show that these opportunities are coming cheap in terms of costs. Simplification allows you to increase the margin on your next dollar acquired,” said Silva. “Make use of automation, don’t fear it. It is super relevant for you. Keep in control and don’t let the horse ride you,” Frijters concluded.