A couple of things about RTB that everyone already knew, but I wanted to make sure got documented by someone:
- RTB has dramatically skewed the balance of technological sophistication required by buyers and sellers of ad inventory. It used to be that ad buyers only had to operate on impressions they bought. Now they need to look at impressions and decide what they are worth prior to buying. And that decision needs to be made in less than 150 milliseconds. Ad buying technology is changing quickly.
- The ad sellers world has not changed nearly as much. Most ad sellers had a yield optimizer before that algorithmically guessed about how the daisy chain should be arranged. Now they simply RTB the impression. The technology used by the yield optimizer has actually gotten much simpler – there is no longer any optimization. You simply take the impression and RTB it. There is no calculation, no learning, no consideration of past performance. Easy.
- Ad Buyers need algorithms and technology to bid in this new world. One of the interesting ways that I always characterized AdLearn, Advertising.com’s algorithm (and this is painting in somewhat inaccurate, extremely broad strokes, so don’t think you are finding anything in here or that I am giving you some interesting information. This is not accurate.) was that it was an algorithm that worked well in situations with poor context. Unlike Google, which scraped the page and attempted to show contextually relevant ads, AdLearn started with no assumptions and generated learnings. What this means is that some inventory, from an algorithmic persepective, was more likely to yield good performance than other inventory for different networks. My personal prediction was that Ad.com’s predictions would tend to work better on MySpace than Google’s algorithm. Your algorithm has an inventory sweet spot also. Know what it is.
- RTB could, more accurately, be called “Real-time cookie inspection”. I don’t think people are actually changing their bids in real-time. Formulating a good bid takes time. Frankly, in our current environment, most of this formulation is called “Media Planning”. A media planner deduces that we should pay $8 for people with this data attribute at a given frequency. Blamo, bid calculation complete. After this, we RTB to look for two things: The frequency cap value and other data attributes we are tracking. Bidding: nil. Cookie inspection: Potentially billions of times per day.
God forbid I am mischaracterizing the world, if you are a company that is changing your bids more than once a minute per campaign and the change is more than simply random variation to test bid strength, let me know! I would love to hear your story.