Why is the Real-Time Bidded Marketplace So Small?
Real-time bidding (RTB) offers incredible advantages over the Ad Men way of doing things (although the occasional three-martini lunch would be a welcome break from the seven-day work weeks to which most of us in the ad tech space have become accustomed). And we have seen truly remarkable growth by almost any measure over the past couple years. According to a research report by IDC and PubMatic, in 2015 RTB display ad sales in the U.S. will have increased 71% over 2010 figures. The advantages of today’s approach to marketing compared with the old way of doing things are as clear as a tall glass of water (come on, you’ve already had three martinis) – transparency, granularity, control and better insights – to name just a few. Oh yeah, and better ROAS for advertisers and improved yield for publishers.
And yet, while it would be nice to pat ourselves on the back for transforming the advertising industry in just a couple of short years, it behooves us to ask the question – why is the RTB marketplace so small? Today there are hundreds of companies fighting for scraps primarily in the direct response sector. As Randall Rothenberg said recently at the Rubicon Summit, the LUMA Landscape consists mostly of services businesses supporting direct response bought and measured advertising. The good news is that there is still a ton of money. The bad news is that 95% of brand budgets do not go into digital media.
Thus, the long term opportunity is HUGE, but where will the growth come from in the next year?
That’s easy. How about using the pipes and the technology that we’ve been building over the past couple of years? I mean really using them. Let’s stop talking about the paddling in the baby pool that is exchange-traded media and apply these rich, robust impression-level decisioning technologies to the entire media plan.
The business case is too obvious to ignore. A 20% decrease in your last click-measured CPA is interesting, and might help you keep your job for a little while longer, but what about a 25% increase in the effectiveness of your TOTAL online ad spend?
That would be a game changer.
Not to mention something that makes it worth going to work on Sunday.