I first was introduced to Real-Time Bidding a few years ago when some of my media-tech friends wanted to discuss how they were dipping their toes into a world similar to equity trading. What they were inferring is that they were part of a team setting up exchanges for trading display ads, those graphical ads on web sites. In our early discussions they were talking real-time, trading ads similar to stocks. The sellers are primarily publishers, and the buyers are comprised of marketers and their advertising agencies. Looking back and seeing its rapid growth and its move into mobile and other digital platforms, RTB has become an unregulated $50+ billion (monthly traded) asset class that trades 24/7 around the world. With limited transparency, huge spreads (compared to equities) and inconsistent pricing, RTB is more akin to currency trading (AKA as FX) than equities.
Over the past few years an entire industry has spawned complete with exchanges and brokers. Each side has its own platform and technology. Representing the sellers (publishers who post their inventory) are SSPs or supply-side platforms, and representing the buyers (marketers and their agencies) which purchase the ads are DSPs or demand-side platforms. These constitute the brokers and market makers.
With this new way of doing business there is now a host of additional service providers, many provide tremendous value, some are just land grabbers, and an entire new language has emerged. Our next few posts will provide both critique and praise for this revolution. Firms providing analytics (how many angels and VCs have introduced us to the “Bloomberg” of RTB), third party data (for ad targeting, they are the ones who know your every move and purchase on the web) and pre-trade and post-trade analysis are springing up on both coasts as well as Boulder, Austin and of course Chicago.
E5A works on all sides of RTB, or as I like to say “we are in this neck deep.” Additionally, as former traders, index designers, portfolio managers, users of Bloomberg and other analytic SaaS, we have a unique perspective on the benefits, functionality, and the pitfalls of RTB and its many service providers. We represent analytics firms, publishers and even a media agency, and we are purchasers of highly targeted ads through RTB.
Our next three posts will address our perspective of this marketplace. Stay tuned.
An aside, I have been feeling sorry for poor Thomson 1. Not once has anyone ever said to us they want to be the Thomson of RTB. For that matter no one has ever mentioned FactSet either. Perhaps Thomson and FactSet should be seeking our advice on positioning and messaging?