Real time bidding (RTB) has become the most overused three-letter acronym in the online ad industry. I thought it would be good to take a look at the rise of ad exchanges and the impact they are having on the industry as a whole.

Worldwide Growth

Worldwide RTB-based spending is expected to grow to $13.9 billion in 2016 (Pubmatic, 2012). Further growth is predicted to come from RTB-based mobile ad sales and premium inventory sales. This growth will give hesitant advertisers more confidence in both the quality and quantity of the ad space they are buying, leading to adoption from across a huge variety of verticals and brands.

Regional Growth

12% of total display ad spend in Western Europe is now being done through RTB (IDC, 2012). The primary source of this growth has come through indirect ad sales. By the end of 2013, the majority of indirect sales in the United States will be RTB-based, with the United Kingdom, France, Germany, and Japan expected to follow soon thereafter. With such a complex ecosystem driving these indirect sales, it’s the challenge of SSP and DSP technology to make this ad spend work harder.

Real Time Bidding Growth

Impact on Publishers

The Rubicon Project carried out a survey in 2011, which revealed that 44% of publishers are now selling inventory via RTB. This figure is continuing to grow, but there is a certain amount of hesitation across the publisher industry. Publishers would be far happier to sell their inventory directly to the consumer or through an ad network, than an exchange and charge a premium on their ‘high value’ placements.

There has been much talk regarding the quality of publisher inventories, but having seen the availability of premium placements increase in recent months, I believe this is set to change. Advertisers have already started to notice this trend, and branding budgets are starting to appear at accelerated speed in ad exchanges.

Impact on Advertisers

With such an aggressive rate of growth forecast, early adopters who have seen improvements in performance display campaigns may now need to consider more innovative strategies. Simple economics will tell us that as demand grows, so will the price of inventory, and we have in fact seen this trend develop already. Quite understandably, advertisers will want to ensure that with the increased cost comes increased performance and to do this, they will need to improve their data strategies and DSP capabilities.

What Does This All Mean?

All this growth in such a complex market can become daunting for brands and marketing managers looking to take the leap into performance driven display. Here at 4Ps Marketing we have been working hard to develop our offering in line with technology and market expansion. Whether you are looking to get the most out of your media purchases by utilising audience data or simply looking for an efficient and results driven display option, RTB can still be the right route.

4Ps isn’t just another performance marketing agency. To discuss how PPC and display advertising are evolving together in order to keep pace with new developments in user behaviour and ad technology, give us a call on +44 (0)207 607 5650 for a no-obligation coffee and chat about data, marketing and user behaviour across all inbound channels. What could PPC management by 4Ps do for your advertising success?