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Trendsetters: Darren Woolley & Michael Smith Navigate Automated Buying, Real-Time Bidding (RTB), plus DSPs, DMPs and ATBs
The advertising business has always been full of buzzwords and acronyms; today the following terms are attracting tremendous attention: automated buying, real-time bidding (RTB), demand side platforms (DSPs), Ad Exchanges, Data Management Platforms (DMPs) and Agency Trading Desks (ATBs).
Google predicts that the future digital display market will be worth USD $50 billion, and perhaps as much as 50% of future trading will be conducted through a real-time bidding process. Without question, RTB has grown quickly, although not all publishers have embraced it as many express concerns about “devaluation” of their inventory. Most agency holding company estimates show that real-time buying currently represents less than 20% of total digital display advertising.
Darren Woolley, founder of strategic marketing management consultancy, TrinityP3, and Michael Smith, managing partner of media consultancy, ID Comms, recently offered their perspectives on how to best navigate the sometimes murky media waters of RTB, DSPs, DMPs and ATBs. They remind us that for all the complexity, this is just about buying the right ad at the right price, serving to the right person, in the right environment at the right time with the aim to encourage the right action or outcome. Simple, right?
Here’s how Woolley and Smith explain the excitement of Google’s estimated $50 billion future display market:
"There are now more people online, spending more time looking at an increasing number of websites, and as a result, there are more available ad slots to sell, not all of which are sold– supply exceeds demand. At the same time, an increase in data collection, targeting abilities, and technologies that allow buyers to bid on and buy individual impressions rather than buckets of impressions, has created a new type of marketplace where advertisers can have greater control of where their ads are shown and to whom they’re shown. To facilitate trading within this new marketplace, ad-exchanges have arisen that provide the hub where buyers and sellers can trade ad slots in real time. The role of the Demand Side Platform is as a technical layer that allows for buying across multiple ad-exchanges, at an impression-by-impression level, in real time with targeting filters enabled-- all within a single interface. The agency-trading desk, as the name suggests, resides within an agency and is a centralized, service-based organization accessed by agencies within the group to buy ad slots via a DSP on behalf of the agencies clients.”
Of course, it’s not quite that simple, and it’s no surprise that a multi-billion dollar business with multiple layers of technology is going to attract some challenges and fierce debate. However, both TrinityP3’s Darren Woolley and ID Comms’ Michael Smith emphasize that marketers, agencies and publishers should follow the discussion and not ignore the opportunities. Their assessment of the hot topics in this area fall under the following themes:
• In-house vs. Out-source
Here is TrinityP3’s Darren Woolley and ID Comms’ Michael Smith’s take on these “hot topics:”
A combination of trading and new ad technology provides equal measure of lack of transparency and mistrust over trading practices. Perhaps much of that mistrust is unfairly levied at media agencies, or perhaps not.
What’s up for debate is how agencies make their margins from their client’s media dollars. Agencies will argue that they’re often “blind” when buying through ad-exchanges. The issue of “Arbitrage” also adds a degree of opaqueness that many agencies say tarnishes them unfairly.
Woolley and Smith suggest that instead of focusing on transparency, it would be better to develop remuneration models that both incentivize and reward. They add, “Models that galvanize all sides to strive for effective and efficient outcomes are clearly the winners in this space.”
You only have to look across the much-publicized Lumascape Digital Display Ad Tech landscape to appreciate that ads don’t always appear where they should. Incorrect ad placement is often innocent; however, at times, it can potentially be reputationally damaging. This is a greatly debated industry issue and one to which today’s marketers should pay attention.
In-house vs. Out-source
Trading through a media agency partner is not the only option today. “In-house” is becoming a very real option for a growing number of advertisers.
The advent of exchanged-based trading and ad tech platforms have given many advertisers new tools to maintain control over their media investments. It also enables them to make business decisions based on controlling their customer data. However, the decision to move digital trading in house is not to be taken lightly. Not only can it be a disruptive force within a marketing department, but there are a myriad of cost decisions and substantial Pros and Cons to be considered.
Try as we may to avoid using the ‘D’ word, it’s impossible when reporting on the developments within the digital trading space. The fact remains that data is playing an increasing role in the decision-making process of how digital media is bought, served and tracked.
Those advertisers who have brought digital trading in-house have data high on their agenda, and want to control the use of their customer data.
Understanding the implications of where digital media trading is going is fundamentally crucial for all advertisers who currently spend in digital, or have any aspiration to spend on digital in the future.