Real-time bidding attracts mobile advertisers

Real-time bidding was unfamiliar to much of the publishing industry a year ago but has quickly launched into the mainstream. Now that RTB has made strides in the display advertising industry, advertising companies are trying to drive its adoption in the mobile space. 

 

In December, real-time bidding received more uniformity in the display advertising industry when a group of technology companies teamed up to create RTB industry standards. Sell-side platforms (working on the publisher side) such as Admeld, PubMatic and the Rubicon Project worked with demand-side platforms such as DataXu, MediaMath and Turn to from the group, called OpenRTB. 

 

Mobile companies have now formed a committee within the group. Members include sell-side platforms in mobile, including Nexage, PubMatic and Smaato; demand-side platforms DataXu, Fluent Mobile, and [x+1]; and ad network Jumptap. 

 

In the simplest terms, real-time bidding is a way for publishers to auction off inventory based on audience data. The first priority of the newly formed mobile consortium will be to set a common language for how the sell-side and buy-side communicate (for instance, establishing the same terms to describe the audience of ad inventory). Upcoming initiatives are planned to address rich media, click tracking, mobile-focused taxonomies and best practices, according to the group.

 

“Our goal is to dramatically accelerate the adoption of RTB in mobile,” said Jim Butler, chief technology officer and vice president of engineering of Nexage, in announcing the group, which launched today. “We believe that by striking first at the core supply and demand interfaces, we will eliminate substantial friction in the marketplace, while maintaining an atmosphere in which healthy competition and differentiation can thrive.” 

 

Jessica Angell, director of marketing for Nexage, said RTB is getting so much traction that publishers need to explore ways to take advantage of it. “It's not something that's going to go away,” she said in a phone interview. 

 

But any effort by the advertising industry is always met with some skepticism by publishers. As was brought up at the PubMatic Ad Revenue conference last fall, RTB presents both opportunities and risks for publishers.

 

One challenge for publishers is that audience buying could potentially devalue the brand, Angell said. RTB only looks at audience characteristics rather than the content type — meaning audience on a premium site is the same as audience on any other website. 

 

But the opportunity for publishers, she said, is that RTB puts a premium on audience data, opening up the door for publishers to get more from their inventory. 

 

"RTB has the potential to really leverage this business," she said.  

 

Like it or not, RTB is becoming more of the norm. In the display ad industry, more publishers have tiptoed into RTB as a way to fill remnant ad inventory beyond ad networks. RTB accounted for more than $350 million in advertising spending in 2010, which will almost double to $823 million in 2011, according to a report from Admeld (available for download with registration).

 

More premium publishers will get on board when private exchanges create RTB-enabled solutions in which select agencies can bid on inventory, according to Admeld. But, the report notes, publishers are “rightfully cautious when it comes to any new solution promising to both delight advertisers and improve yield.”