Will the rise of Exchanges and Demand Side Platforms change the face of online media trading? More opportunities, but greater challenges!
By Osman Bangura | 18-03, 2010
Succeeding in the new age of digital media consumption will require aggressive adaption of current business models in order to suit the trends in the ecosystem in an efficient way that will lead to more revenue for publishers and better ROI for advertisers.
In today’s rapidly evolving world of innovative technology, the need for creative solutions that would cut down costs, simplify processes, and increase transparency is drastically changing the digital media landscape. In online media consumption, the heat is on. An entire ecosystem is at the verge of loosing its traditional/classical structure. The emergence of Ad Exchanges and Real Time Bidding (RTB’s), as an auction-based market place to trade impressions based on the model: “the highest bidder gets it” is an innovative technology that does not only represent opportunity but a challenge for buyers and sellers in the market place.
Demand Side Platforms ‘DSP’s’, which in many ways provides advertisers with enormous benefits is becoming ‘the talk of the industry’. Networks and agencies played an important middleman role in the old pre-buying model. In the new age of media consumption, actively serving clients using both models: the Pre-buying and RTB is crucial to survival and will be met with technological challenges. This new wave of change will force many companies to redesign their business model in order to be able to effectively compete and meet the daily demands of their clients.
Since its inception, Real Time Bidding (RTB’s) marked a turning point in the history of digital media consumption. It signifies not only a fundamental change in the media ecosystem but also a slow demise of the classical media buying and selling business model. In a dynamic RTB environment where advertisers are provided with clearer insight regarding the impressions value and level of ROI, they will be willing to buy media and bid even higher for impressions, which will lead to higher CPM for publishers and better returns for advertisers.
In case you’re still wondering why DSP’s are becoming the most talked about topic today, it’s simple. Imagine a single system that offers online media buyers the opportunity to buy across multiple platforms and inventory sources in real time. It enables an advertiser to reach the right user, at the right time and place in a competitive bidding environment and eventually assigning an individual value to each ad impression. This specific targeting possibility in real time is the most outstanding trend in online media trading that is set to put an end to the often lower CPM resulting from assumptions about certain audiences. Not only will better performance in RTB simultaneously benefit publishers, efficient targeting based on a user’s unique characteristic will also lead to higher CPM and increase ROI for advertisers.
Additionally, DSP’s provide efficient targeting possibilities, helps decrease sales costs, and buyers pay for CPM in a real time environment. Furthermore, a DSP gives an advertiser greater control over pricing, targeting, and managing their online campaigns. Simply, it provides sophisticated and tailored targeting options in which an advertiser can eliminate waist due to pre-knowledge about the value of an impression and reporting in Real Time. Advertisers can target and dynamically allocate buying decisions across multiple exchanges based on market price moves. This helps them source inventory across multiple platforms with large number of websites that can meet their inventory needs with the possibility to compare, evaluate and decide on their level of investment based on their intended ROI. This model is leading to an increase in the pressure faced by players to be able to deliver to advertisers across multiple platforms.
Furthermore, RTB exchanges also offer publishers the opportunity to monetize their remnant inventory through a yield management system. A minimum requirement can be set for impressions based on content and ad type. Additionally, specific targeting by advertisers can earn publishers more value from each impression.
If direct selling in real time continues to work better for sellers and buyers, networks and agencies would need to re-consider their business model. In order to strengthen their position and increase their usage of RTB technologies in-house, networks will continue pushing forward in developing and acquiring some of these exchanges, and agencies would partly become DSP’s.
Finally, in order to succeed, media agencies will need to acquire in-depth knowledge about clients’ audiences through the implementation of advanced technologies backed by a business model that works best in today’s evolving digital media ecosystem. Whether you pre-buy your inventory, reserved for future use, or buy in real time, at the end of the day, what matters the most is reaching your target-the right audience, and having them perform your desired actions.
Need of more information on how to capitalize on existing opportunities, avoid threats to your business, minimize risks, and get the right set-up and configuration needed to succeed in this complex ecosystem?
Call DQ&A at +31 70 3001950 or e-mail your questions to info@dqatraffic.com.
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