Posts Tagged ‘RTB’

The Real Problem with Getting More Spend Online

October 20th, 2011

Mark McEachran

Two weeks ago I participated in a couple of events during AdWeek in New York.  The first was Rubicon’s own #letsfixit event where agency advertising representatives joined a panel with publishers and the rest of the demand train to discuss the difficulties of running ads online.  The attention shifted from learning about the process to learning about where the process fails.

Bernhard Glock of Medialink, who was not on the panel, chimed in with a profound thought.  Buying on television is buying something that’s familiar, with seemingly known or at least comfortable impact and expectations on results.  By contrast, buying online display is a complete mystery.  His solution, just buy on television because that’s what he understands.

In addition to all the great insight each panelist shared, this sticks out as an important point of the event.  If there’s something to be learned by this it’s that the Kawaja diagrams are illustrating the point – online is confusing to the buyers, and that’s bad.

The second event I attended during Adverting Week was the OpenRTB TownHall discussion.  I was lucky enough to participate as a panelist so I had ample opportunity to grab the mic and dig in when I found things getting interesting.  Alex Horowitz and Stephen Tompkins were in attendance as the lone representatives of agency buyers – Vivaki.  The old, beaten, dead horse rose up from the grave with the phrase that ‘buying online is less efficient than print and television’.  I decided to beat that horse a little bit more and asked the agency guys if that’s really keeping dollars from moving online.  The answer: No.

Efficiencies, or lack thereof, are not the things keeping big agency dollars offline; it’s lack of inventory.  More specifically, it’s lack of premium inventory keeping the money at bay.  Or is it?

At the end of Ad Week Rubicon hosted a #letsfixit cocktail party to show appreciation for everyone’s thoughtful insights and general efforts in the online space.  As I mingled I kept my topic top of mind with a few insightful folks.  Todd Sawicki, from the Cheezburger Network, engaged me in a friendly argument over why the brand dollars aren’t moving online from TV.  He had some good insights in the form of a story: When a brand advertiser, a fast food restaurant for example,  puts up an ad on TV at 7pm he can track that to increased sales in that region at 11pm.  He can predict how much he’ll profit to within 1%.  Some of these guys have little dashboard widgets or something that shows them the money.  And there’s no equivalent online.  There’s no prediction that’s accurate enough, no cause and effect that can be tracked as simply as “I spend X, I get Y, repeat”.

Repeat – that might be the key.  Innovation in online advertising does not give you repeatable results for very long.  There’s always something jumping up that changes the game and the traffic doesn’t hit the same sites with certainty.  What happened last year may not happen exactly the same this year.  This leaves brand advertisers and their agency representatives in a difficult position when putting together an online ad budget and showing the projected results.

So what’s the take-away here?  We’ve got 100s of little companies trying to solve efficiency problems for buying and selling online display, video and mobile.  And those are fine companies, but a lot of them can’t get their hands around the big problems.  Coming out of Ad Week it seems that we like to discuss those problems and argue about them in meaningful ways.  And it feels like the conversation is getting elevated, at long last, to the point where we’re beginning to understand the entire ecosystem’s roadblocks to expansion.  Randall Rothenberg says we’ve only got 18 months to get this thing right, so let’s keep that conversation going.  #letsfixit

From Good to Great: project #letsfixit

October 3rd, 2011

Kara Weber

Cadreon, Forbes, Forrester Research, Medialink, Seamless, Triad Retail And Vivaki “Join The Project”

Today marks the kickoff of the most exciting Advertising Week New York has ever hosted, and almost all the terrific news comes from the digital advertising sector. We’re thrilled to be contributing to the good news: last week the Rubicon Project, in conjunction with Econsultancy, released research highlighting that advertisers in both the US (68%) and Europe (57%) said they had increased their investment in online display advertising in the last year. It’s not just us – spend is up, advertisers are happy, parties are rollicking, and interest and awareness of the value of digital content and the advertising that supports it has never been higher.

This is great stuff, and we’re lucky to be at the heart of it. But what if this is all just the tip of the iceberg?

On Wednesday, October 5, the heart of Advertising Week (aka #AW8), the Rubicon Project is hosting #letsfixit: Simplifying the Buying and Selling of Digital Advertising. #letsfixit isn’t just another run-of the mill Ad Week panel. What’s different?

THE LINE-UP

An amazing line-up of thought leaders will engage the audience in a provocative and lively open discussion aimed at helping publishers, advertisers and consumers realize the true value of digital experiences.

Opening Remarks: Frank Addante – CEO and Founder, the Rubicon Project

Moderator: Xavier Kochhar – Managing Partner, Media Link

Discussion Leaders:

  • Teri Gallo – VP, Marketplace Development, Cadreon
  • Matt Barash – VP & Advertising Director, Forbes Media
  • Michael Greene – Analyst, Forrester Research
  • Sara Livingston – Manager Digital Marketing, Seamless
  • Brian Quinn – CRO, Triad Retail Media
  • J.R. Randall – Director, Partnerships, Vivaki

THE ATTENDEES

Leaders from companies across the online advertising spectrum, including top publishers (like NBC, Weather.com, WebMD, Trulia, CareerBuilder…), agencies (like Vivaki, Cadreon), DSPs (like Turn, MediaMath, Appnexus), ad networks (like Ad.com, Undertone, Criteo), data companies (like TargusInfo, Exelate, BlueKai), buyers (like Amazon, Seamless) and ecosystem influencers (there’s no one like Luma Partners, AdExchanger or Comscient), who will discuss what’s required to move the industry from good to great. Even the guy who said SSP’s are dead will be there.

THE EXPERIENCE

This isn’t an event for the shy or retiring. Our first #letsfixit event in June was called “the best content of Internet Week.” There were arguments, bawdy remarks, provocative declarations and ultimately actionable ideas. Everyone participates in the conversation at #letsfixit, as all leaders in the industry will need to participate in taking digital advertising into the next era.

Interested in an invite? The event is fully reserved, but a waitlist is forming. Request your invite. Can’t make it but want to pitch in with questions, ideas and immodest proposals? Join the conversation on Twitter. And watch this space for more on how we move from the good times of this exciting Ad Week toward a $200 billion industry that delivers relevance to consumers, performance to advertisers and (nearest and dearest to the Rubicon Project), yield to publishers.

FACT: RTB-enabled Sites saw 37% Lift Year Over Year, 25% Greater Lift on Average. Do You RTB?

February 9th, 2011

Mark McEachran

the Rubicon Project launched REVV Protected RTB 1.0 last year to enable publishers to leverage all the benefits of real-time bidding while ensuring their direct sales channels, pricing and site visitors remain safe. Since then, our team has gathered valuable insight and feedback from publishers and demand channel partners on the benefits and risks associated with RTB. In addition, our business intelligence analysts have spent a great deal of time combing through the data from these first six months of programmatic buying in the REVV Marketplace.

As Product Manager of REVV Protected RTB at the Rubicon Project, I have had direct access and feedback on this information. I’ve shared some of my insight on the RTB topic with recent posts such as “Using Dynamic Price Floors to Protect Publisher Value” and “the RTB Primer.”After some positive feedback (and our marketing team identifying my passion for writing), I felt inclined to keep writing.

Today, along with the Rubicon Project team, I’m happy to share our latest free Market Intelligence report: “Mechanics of RTB.” The report explores the world of real-time bidding (RTB) as it relates to publishers of premium websites, and the monetization strategies that incorporate RTB to bring publishers the most revenue possible across all sales channels.

Highlights of the white paper include:

  • The impact of RTB for publishers who include it as part of a holistic yield optimization mix (400% increase in Q410 spend);
  • The CPM effect: eCPMs on RTB-enabled inventory on average 143% greater than those paid by non-RTB buyers;
  • The Lift Factor: RTB-enabled sites saw 37% lift year over year, or 25% greater revenue lift on average than sites that did not include real-time bidding in their optimization mix.

Click here to download the free report (scroll the bottom of the Market Intelligence page & find “Mechanics of RTB” under Best Practices).I hope you find it useful. Of course, if you have an feedback or comments – I’d love to hear them.

Using Dynamic Price Floors to Protect Publisher Value

January 18th, 2011

Mark McEachran

I was reading a recent post on AdExchanger, “Smoking the RTB Weed,” about a Real-time bidding paper Metamarkets was gearing up to present at an industry event and it got me thinking… (n.b. If you’re not already familiar with RTB, you might want to start with my earlier post on the topic to get up to speed. This post is pretty ‘inside baseball.’)

There’s a lot concern in the online ad ecosystem around the disparity of data between publishers and advertisers. These are not new concerns but they are attracting a lot of attention due to the opportunity that Real-Time Bidding (RTB) presents in leveling the playing field. Historically advertisers have been incentivized to understand the audience behind the publisher in order to maximize their yield. This has led to a large investment in technology to serve the advertiser, tilting the balance of information to their favor and leading to rampant arbitrage.  As a result, most impressions are still sold without adequate protection.

Real-Time Bidding affords the publisher an opportunity to rebalance the terms of the sale of inventory. In fact, in many ways the savvy, well-armed publisher can leverage RTB to gain an advantage in that each impression is evaluated and assigned a value by several buyers.  During an auction only one buyer can purchase the impression, but the data gathered from the other buyers is not discarded, rather it is captured by the publisher (or in our customers’ case, by REVV) and stored for analysis and pricing determination on all future bids.

One form of that analysis is auction simulation.  Using a Hadoop cluster and proprietary algorithms the REVV platform simulates the auction at different price floors, usually at penny increments between five cents and 20 dollars.  During the simulation the system records the revenue gained for each impression whether it goes to the highest bidder at the second price, at the floor price or even if the floor prices out all bids and the impression goes to a non-RTB demand source.  After the simulation another algorithm runs through the revenue at each floor and determines at which floor price the revenue is maximized.  These simulations are run at different levels of audience granularity and the resulting, boiled data is stored.

REVV pricing intelligence algorithms draw on this data whenever a publisher has configured a segment of their inventory to use a dynamic floor.  The publisher has the option to choose a price range for that inventory and REVV responds by providing the optimal floor within that range. If the publisher doesn’t choose to set their own price range, REVV will make a price range recommendation based on the bid price and volume distribution. Either way, new floors are constantly set and re-set for the inventory in response to changes in demand.

Dynamic Price Floors is just one of the ways that the REVV platform empowers the publisher to claim higher yield from their inventory, and reclaim balance in the marketplace. We’re excited to announce that we’ve released enhanced Dynamic Pricing Floor technology today, and we’ll use this space to keep our customers and partners up to date on the results we see in the weeks and months ahead.

Optimizing for 2011

November 19th, 2010

Devan Fearman

What a year it’s been, both here at the Rubicon Project and across our industry. As we witnessed among publishers leveraging the REVV platform and recorded in a few of our past market reports – the industry has continued to see growth in advertising spend throughout the year.  In Q2 alone, the Rubicon 20 Index, a measure of performance across a number of factors (including CPM, revenue and traffic volume) on a roster of twenty of the Web’s most heavily-trafficked properties, rose 47 percent  since the start of 2010.  And this trend has been echoed by numerous industry research firms. The Interactive Advertising Bureau (IAB) recently released a report with PriceWaterhouseCoopers, finding ad revenues up by 17 percent in Q3, reaching $6.4 billion.

Looking ahead to 2011, eMarketer predicts total U.S. online ad spend will reach $27.2 billion, which is no surprise. With the market innovations we and our industry peers continue to deliver to the industry, we firmly believe that overall display market is becoming more efficient and effective. As such, we expect marketers to continue to drive more dollars toward display advertising in order to reach hundreds of millions of consumers around the world.

That said, factors both new and old will affect Q1 spend. Historically, seasonal market factors influence online advertising revenue most significantly between Q4 & Q1 as holiday campaigns close out, budgets for the New Year take time to ramp up and the overall market tends to drop in January. We anticipate this will be true again in 2011.

There are certainly economic factors that will impact online advertising revenue in Q1, and while we’re optimistic, we can’t pretend to know exactly what’s coming. Between our strong partnerships and direct access to over 600 ad networks, exchanges and DSPs that access audience and inventory through the REVV Marketplace, we know many advertisers have not yet set their Q1 budgets for 2011 – potentially slowing already reduced first quarter spending.

On the flip side, reports continue to suggest that brands are moving dollars away from traditional media and onto the more measurable online access points to publisher inventory, including real-time bidding (RTB). For these reasons, no one knows what kind of impact we may see in Q1. The number of demand partners in the marketplace has nearly doubled year over year, which could also make the seasonal Q1 decline less impactful. All those variables aside, it is possible that in the early part of the quarter some publishers will experience diminished fill rates and CPM rate drops. In years past, an upward tick begins midway through the quarter; the same will likely be true in 2011.

As a partner to more than 350 premium publishers and the developer of REVV, the technology platform that powers the largest display ad marketplace in the world, the Rubicon Project is taking steps to ensure continued revenue growth for publishers in the new year. Through the REVV Marketplace, premium publishers are exposed to the maximum number of demand channels possible – which will help drive higher revenue. And different from previous years, publishers may also minimize the seasonal impact of Q1 by  leveraging Protected RTB™ 1.1 technology as an additional demand channel.

The graph below expresses, with 2.5 years of historical pricing data captured through the REVV Yield Optimization platform, the seasonal impacts of CPMs throughout the year. All variables remaining constant (traffic fluctuations, user session length, RTB, ad types and sizes, advertiser block lists, geography and other macro-economic variables) January is clearly the lowest paying month of the year trending upward for the remainder of the year and ending on a high note in December with CPM’s at 53% higher than January. Additionally, while ad spend is lower at the beginning of each quarter, there is consistent upward pressure driving CPMs higher quarter over quarter.

The RTB Primer

October 13th, 2010

Mark McEachran

Real-Time Bidding (RTB) might seem like old hat already, but there are still many misconceptions out there about how it actually works. It seems that there’s not a ton of material out there that explains RTB in a straightforward manner; until now.

The market explains RTB as sales channel where advertisers bid on their desired ad impressions, with the targeted impression going to the highest bidder. RTB ad serving is made possible through APIs shared among networks, exchanges and optimization platforms that dictate detailed transaction conditions.

While RTB’s value to publishers seems enticing as access to more demand sources equates to increased publisher revenue, the risks, however less apparent, are significant. Because RTB gives advertisers their desired audience at the lowest possible price, publishers are at risk of downward pricing pressure – and net negative revenue impact – resulting from the buy-side’s increased efficiency .

It’s for this very reason that the Rubicon Project recently launched the REVV Protected RTB 1.0 beta. I’ll explain how the REVV for publishers ™ 3.2 Yield Optimization platform handles Protected RTB at a high level to paint a clearer, basic picture.

How Bidding Works
A quick note – as you read through the following, bear in mind that the entire process described in the paragraphs below takes place in less than 80 milliseconds. For perspective, it takes about 300-400 milliseconds to blink an eye.

Let’s start with the ad request. This is the same ad request (a request from a publisher to fill a given ad impression) that would come in without Protected RTB engaged.  The REVV ad engine checks the rules for that impression to see if it is eligible to receive real-time bids (the system calls that “Protected RTB enabled”) and which Demand Side Platforms (DSPs) should get exposure to it, per the publisher’s permission control settings (we currently work with a number of DSPs including AppNexus, Turn, Triggit, MediaMath, DataXu, Quantcast and Media6Degrees).  If the impression is Protected RTB enabled, then the REVV ad engine packages the pertinent information about the impression and anonymized user information (no personally identifiable information) and sends to REVV’s real-time bid system.

The bid system receives the request from the ad engine, unpacks it and creates distinct request packages for each DSP.  Each bid request package includes information the DSP needs to make a decision whether to bid, including basic information about the site, the anonymized user information and ad itself parameters like dimensions and acceptable creative types. These request packages are all in a standard format defined for the REVV Protected RTB platform; each DSP has implemented the communication protocol according to REVV’s API specification.

How DSPs Respond to Bids
As mentioned, each DSP receives an individual bid request for the impression.  Each DSP has it’s own response to these requests. Most DSPs have some form of business rule working for them to choose an appropriate response.  Some of them are running auctions within their system, others are running rotation based ad serving solutions.  Some are armed with third-party data or their own audience data and algorithms that work in real-time to decide which campaign to bid with and at what price.

Once their proprietary technology has evaluated the bid request, DSPs generally respond to a given bid request in one of two ways.  They return a valid bid with an ad creative and the advertiser name, or they return a bid of 0 or send a non-bid signal, which indicates that they chose not to bid on the impression.  If the response from the bid partner takes too long, REVV will ignore it.  REVV will not let Protected RTB compromise expedient ad serving. Needless to say, in a process called real-time bidding, time is of the essence.

Ad Quality Protection & Real-Time Bids
With bids in hand, the REVV bid system checks each against the publisher’s advertiser block list with Real-Time Advertiser Blocking.  The system not only blocks disallowed advertisers, it also tracks unknown advertisers and reports them to the Rubicon Project’s Ad Operations team for categorization.  Sites can be configured to allow or disallow unknown advertisers.  The bid system packs all the bids for the impression back into a single package and sends it back to the ad engine.

And At Last, the Real-Time Bidding Auction
After all these steps are complete and all viable bids are received, an auction takes place inside the REVV ad engine. All real-time bids are considered against one other; they are also considered alongside all other ad tags and direct campaigns that are eligible to serve on that publisher’s site. This is a critical feature of REVV Protected RTB – by competing against all other potential ad tags (from ad networks, exchanges, and other demand sources), real-time bidders face upward pricing pressure from the most sources of competition for that impression. Only real-time bids that beat out all of these other sources of demand, real-time or otherwise, will win auctions.

Bids also must beat any relevant price floors that are configured for the site.  The auction is “second price” style, which means the winning bidder pays just more than the next highest bidder’s offered prices, or ad tag CPM. Further, CPMs from the REVV yield optimization engine act as bids within the decision process, helping to preserve the fair market value of publisher inventory.  The winning RTB ad, ad tag or direct campaign is delivered to the site, and more specifically to the user, in around 80ms from request to delivery. The ad shows up just like any other ad from REVV with one difference.  Protected RTB ads have the price encoded on the ad request.  This mechanism sends the signal back to the DSP communicating that their ad won the auction and lets them know what the clearing price is.

As a result, REVV Protected RTB 1.0 is allowing publishers to leverage all the benefits of real-time bidding while ensuring their direct sales channels, pricing and site visitors remain safe.

To learn more about the Protect RTB™ 1.0 beta product and our overall REVV platform, click here.