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Real time bidding

  • April 2014
  • IDATE
Report ID: 2126641

Summary

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Key findings

- IDATE forecasts the global RTB market to grow to 17 billion EUR by 2018, up from an estimated 4 billion EUR in 2013, representing a CAGR of 36% from 2013 to 2018. RTB is a form of programmatic buying, and forms a part of the display-advertising market. It is complementary to targeted advertising which is refined through the use of personal data, where RTB gives this targeted advertising the real-time added value. RTB was the fastest-growing segment within the advertising market in 2013 (and for 2012 also), and there is no reason to believe that this trend will not continue into 2014.

- The growth is RTB is driven by several factors, the most obvious being the increase in ROI which RTB brings for both advertisers and publishers. From the publisher point of view, they see an increase in eCPM, since RTB can provide better-targeted advertising space in real-time, which is more effective than traditional inventory. From the advertiser point of view, the increase in eCPM means that they have to pay more to advertise in that inventory. However, the use of RTB means that the advertisers have access to much more targeted, relevant, and thus effective inventory, which compensates for the increase in eCPM.

- Today, RTB is used almost exclusively for indirect inventory. IDATE estimates that in 2013, at least half of all indirect display inventories were sold though RTB technology, and that by 2018 the leading countries will see almost full RTB penetration for indirect inventory. But it is also expected that RTB will expand into direct, premium inventory sales, in conjunction with increased personal data use (targeting) to further increase the premium value of the inventory. This is already starting to happen with the concept of guaranteed upfront sales entering RTB. The concept here is to trade direct, premium inventory on an RTB platform, whilst giving publishers a high amount of control and also advertisers the trading real-time benefits of RTB. This is done by the buyers (typically DSPs) sending a request for certain types of inventory, typically audience demographics (such as age, sex, income or place) and allocated budget to SSPs. The SSPs then provide the buyers with a packaged premium offer aggregating various publishers to meet the buyer request. This is different to standard indirect RTB trading, as indirect inventory is sold as spots rather than packages. The buyers then purchase this package upfront, together with guarantees from the publisher.

- Another growth driver for RTB is how big brands have embraced the technology. In display advertising Google and Facebook are number one and number two respectively, and by a long way, and that RTB has been embraced by these two juggernauts has certainly helped spread the technology in the market. The Facebook launch of FBX was arguably a defining moment, adding inventory and thus liquidity into the market. This also meant increased competition in RTB, and more urgency for other large brands to embrace the technology, either as publisher or RTB provider. Also notable are commercial giants Amazon and eBay who have started to provide RTB on their sites, and the acquisition of MoPub by Twitter in September 2013. The leading specialist players along the display- advertising value chain, such as DSPs, SSPs and ad exchanges are also all embracing RTB, to maintain their value within the ecosystem.

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