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Why RTB Is The Fastest-Growing Segment Of Digital Advertising … And What It Means For Mobile

Written on
Dec 27, 2013 
Author
Fred Hsu  |

EDITOR’S NOTE: This article, originally published on September 5, 2013, placed at No. 12 in our 20 most popular articles of the year.

ADOTAS — Programmatic buyers on desktop have many reasons to like real-time bidding (RTB);  it’s standardized, it’s efficient and there are plenty of vendors out there to help source, target and optimize supply.  With media conglomerates like News Corp having recently launched their global programmatic advertising exchange, RTB remains the fastest-growing segment of digital advertising, if not due to its continued adoption then certainly by the lack of new desktop-based digital media buy-sell technology.

This article looks at a challenge overlooked by many marketers and advertisers within the programmatic buying ecosystem on desktop and mobile alike — cookies — and what it means for the future of programmatic buying.


When you have cookies

Things are great.  If you’re a marketer or programmatic buyer, everyone has already done the heavy lifting for you:  the publisher, the programmatic buyer or trading desk, the ad network or exchange making cookie data available to the buyer and facilitating the transaction.  In fact, you could probably set up a DSP with one sales guy and no technology.  There would certainly be many like you.

When you don’t have cookies

You’re (mostly) flying blind, reliant on first-party data, if available.  The value of the supply quickly diminishes, and here’s where the naysayers about RTB buying have it right — it looks, feels and certainly performs like remnant traffic.

User migration to mobile

There’s no dispute that users are migrating from desktops to smartphones and tablets, and those users are seeing most of their ads within apps, not their mobile web browsers, where there are no cookies.  This presents a huge problem for programmatic buyers who rely on third-party cookie data to segment, target and optimize users as they pay less attention to their desktops and more to their Samsung Galaxy phones.

Most mobile ads don’t support cookies

Thank Apple and Google for that.  Apple and Google have very little incentive to port cookie support, a nearly 20-year old cookie technology first developed by Netscape in 1994, to native in-app advertising, which now accounts for more ads shown than mobile web browsers that do support cookies. And why should they?  It’s hard enough trying to fight the device wars — selling phones and evangelizing users to their platforms — let alone providing advertiser support for an antiquated web technology.

Making sense out of the device-specific IDs

Most mobile RTB exchanges now support privacy-compliant, standard identifiers such as the Apple ID For Advertising, or IDFA, and the Google Android ID. It took a while, but Apple and Google finally got there. And the first thing mobile app publishers are doing is passing along these IDs to RTB exchanges to maximize their revenues, with little fear of getting their wrist slapped or god forbid, their app pulled from the Google App or iTunes stores.  In a post-PC era, it’s now up to the many programmatic mobile buyers and mobile data management platforms out there to aggregate, segment, and provide targeting for marketers.  There’s not much progress here, but the industry is quickly evolving, so stay tuned.

RTB continues to be a dominant form of digital advertising, even more so within mobile, where users, standards and platform wars are quickly growing.





Fred Hsu is CEO of RTB.com. A hands-on entrepreneur, Fred previously founded Oversee in 2000, selling a minority stake to Oak Hill Capital Partners in 2008 for $150 million. Fred grew Oversee from 1 to over 225 employees, and from $0 to over $200 million in revenue, all with zero outside funding. He remains Oversee's largest individual shareholder. An active angel investor and startup advisor, Fred has invested in numerous pre-IPO companies and startups such as Second Porch (HomeAway), Rubicon Project, Space Monkey, CakeHealth, Estately, AppBank, AirPR, UserFox, and many others. Fred holds a Bachelor’s degree in Computer Science from UCLA.

Reader Comments.

I think the technology itself has come a long way, particularly in how it has leveled the playing field for the small guys in this game. I think it’s exciting myself. Like programmatic trading of stocks, this is a smart and hyper sensitive way of making mobile advertising more effective. Props to the likes of Twitter, Airpush, MM, and others who have had the foresight to get into mobile RTB now because they recognize this “future” phenomenon isn’t so far off after all… http://www.airpush.com/what-is-mobile-rtb-and-why-should-i-care/

Posted by CodyWhiles | 6:23 pm on October 7, 2013.

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