EDITOR’S NOTE: This article, originally published on July 25, 2013, placed at No. 5 in our 20 most popular articles of the year.
ADOTAS — The Real-Time Bidding (RTB) revolution in online advertising has been underway for several years. But to elevate the revolution to even greater heights, marketers now need to bring their RTB tactics completely into the 21st Century by adding a much needed component: Real-Time Analytics.
RTB-driven online advertisements give marketers tremendous leverage in synchronizing the delivery of specific messages to specific audiences based each Web user’s demographic profile and online habits. But traditional reporting capabilities have lagged far behind as ad buyers, publishers and exchanges have typically relied on reporting processes that require hours or even days to compile and assess the massive amount of RTB results.
With the growing popularity of RTB, the requirement for real-time reporting and analytics is now critical — not only because of the latency of present systems and the risks of RTB auctions that lack real-time transparency, but also because of the many benefits real-time analysis delivers. Following are some of the top benefits that buyers, publishers and exchanges can leverage to fine-tune the many controls that can be adjusted to improve online advertisement performance:
Benefits for Buyers
- Optimize Campaigns by Testing Simultaneous Advertising Strategies: If the feedback loop on the success of online ads takes several hours or days, buyers cannot effectively improve their tactics. But by moving from batch-oriented analytics to real-time feedback, buyers can rapidly iterate through advertising tactics and improve response rates to specific ads. Buyers can also evaluate multiple strategies running in parallel to learn which ads and which audiences generate the highest click-through rate, engagement rate, or reach for a campaign. On the fly, they can then focus ad buys on the top approach—while the audience is still engaged.
- Increase Effectiveness of Ads by Changing Them Quickly: Analyzing RTB program performance in real time allows advertisers to switch to the most effective campaign in reaction to the online audience demographics. Whether testing different campaigns for a specified target audience, different campaigns for different audience segments, or a fixed message for different audiences, buyers can quickly shift to new ads instantaneously based on which ads and which audience capture the best performance.
- Increase ROI by Identifying Fraudulent Inventory: Studies show consumers never see as many as 30 percent of all display ads on Internet sites.1 According to a study by RadiumOne, ghost publishers as well as shady Web crooks and their bot-employing associates steal up to $400 million per year from the online ad business.2 This problem is even worse in mobile ads. According to a study by Trademob, 40 percent of mobile ads are fraudulent.3 Instead, the ads show up on spam or ghost sites, or they get buried under other pop-up ads. Some publishers also place stacked ads below the fold so users never see them. Real-time analytics integrated with other tools can help identify fraudulent occurrences immediately by showing ads with extremely low click-through rates or extremely high click-through rates by using bots—an indication that something may be wrong. This gives advertisers sufficient time to react rather than discovering occurrences many hours or many days later through batch analysis when website visitors are long gone.
Benefits for Publishers
- Optimize Floor Pricing: Setting price floors makes sense as an advertising devaluation protection mechanism, but minimum floor levels must be analyzed in real time to enable changes as market conditions warrant. Take for example a metropolitan newspaper that sets an ad floor level of $1.00 CPM. With real-time analytics, the newspaper may discover many buyers bidding 95 cents for ads targeting a specific consumer group. The newspaper can then lower the floor to make sure it does not miss out on this revenue opportunity. Without analytics, the newspaper could have lost the opportunity—for just a mere nickel! With real-time analytics, publishers can accurately assess the trade-offs for different CPM levels so they can decide the optimal floor—which may vary by time-of-day and by different website zones.
- Align Correct Ad Inventory Levels: Publishers need to assess the amount of ads to post per page as influenced by the engagement of site visitors. The number of ads per page that works best can vary according to the demographics of the audience and the amount of editorial content, both of which may fluctuate frequently over the course of a day. Publishers need real-time analytics to help them determine the maximum number of ads to ensure they do not create a negative environment that discourages consumer click-throughs. Results that arrive hours later do no good.
- Increase Ad Impressions by Adjusting Editorial Content: The content that runs on each website page tremendously impacts the number of consumers that visit the page, how long they stay, and whether or not they click on ads. Publishers also need to gauge how particular content generates more visitors and if the content influences ad click-through rates.
Benefits for Exchanges
- Increase Revenues with Higher Operational Awareness: Where RTB exchanges serve both buyers and publishers, real-time analytics help monitor the smoothness of transactions so exchanges can prevent friction between the two groups. Exchanges need to know, for example, if publishers go offline or run into delays in displaying ads on time. Exchanges need to help keep publishers online so their systems keep functioning at high levels of uptime. They also need to keep buyers in-the-know so changes can be considered for extended offline timeframes.
- Facilitate Buyer and Seller Targeting: With the help of real-time analysis, exchange account managers are better equipped to assist buyers in identifying look-alike audiences appropriate for ad inventories. Account managers can also more easily identify new sources of supply for demand partners. Real-time analysis essentially enables exchanges to connect buyers and sellers more intelligently.
- Generate Higher Auction Effectiveness: Real-time analysis also allows exchanges to view the number of bids on a given ad, the dispersion gap between high and low bidders, and how quickly buyers bid on ads. The analysis also helps identify fraudulent ads. Making sure auctions function smoothly is key for maintaining long-term relationships with buyers and publishers.
Maintaining Pace with the RTB Revolution
Consumers visiting website pages often leave in the blink of any eye. Analysis that arrives the next day or even the next hour simply no longer provides valid information. By then, it’s too late to change buying and publishing tactics.
Thus, for buyers, publishers, media agencies, trading desks, ad networks, DSPs and other players in the RTB advertising ecosystem, the strategy is clear: The only way to move to the new century with the RTB revolution is to integrate and leverage the benefits delivered by real-time analytics.
- comScore, “Changing How the World Sees Digital Advertising,”March 12, 2012.
- Business Insider, “Full Cost of Online Ad Fraud May Be $400 Million A Year,” April 22, 2013.
- Trademob, “40% of mobile clicks are accidental or fraudulent.”