Real-Time Bidding Makes Its Way Into the Mobile Ad World

Real-time bidding, or “programmatic buying” as it is sometimes called, is remaking the online ad industry with its approach of matching supply and demand of ad inventory in real time against the attributes of any given viewer.

Now this trend is starting to creep into how mobile ads are delivered.

First, the stats: There is little doubt that this technology, which had its fair share of critics when it first debuted a few years ago, is beginning to dominate the online ad industry, especially as more advertisers become familiar with the environment and the many players.

eMarketer recently revised upward its projections for RTB digital display advertising in the U.S., forecasting that marketers will spend US$3.34 billion this year on real-time-bidded ads, up 73.9 percent from 2012. As recently as June, eMarketer forecast RTB spending would reach $3.32 billion, for growth of 72.7 percent.

It has also revised upward growth rates for future years — it now expects advertisers to spend $8.69 billion on RTB ads by 2017, up from the $8.51 billion previously forecast.

The reason for the increase in digital ad spending is mobile, eMarketer notes, pointing to higher spending in this category — with higher accompanying levels of RTB.

Yet while the numbers point to a tidal wave of RTB-fueled mobile ads in future years, the sense on the ground — at least among marketers not steeped in mobile advertising — is that it is still an experimental format, and especially so for mobile. They believe, in short, that the jury is still out on this technology.

‘A New Age in Mobile Marketing’

Not so, experts say. If it isn’t apparent now that RTB is driving mobile ad spend and delivery, it soon will be.

“RTB is becoming dominant in mobile marketing as we speak right now — I would go so far as to call it a new era for mobile marketing,” Fred Hsu, CEO of RTB.com, told CRM Buyer.

The driver, he says, is the explosion of additional users due to their smartphones and tablets — “RTB will account for the way ads are served to a majority of these users,” he said.

For many publishers, buyers and agencies, programmatic buying is no longer in the testing stage, Victor Milligan, CMO with Nexage, told CRM Buyer.

Instead, they are moving toward adopting programmatic buying as a strategic technology for both public and private trading, he said — “in short, RTB and programmatic are rapidly shifting from a disruptor to a strategic foundation for mobile advertising.”

If Not Now, Then When?

All that said, the majority of mobile ad demand, at this point in time, is still not RTB-enabled, Mike Cohen, vice president for performance and programmatic advertising with InMobi, pointed out.

“Real-time bidding is growing at exponential rates in the mobile advertising world,” Cohen told CRM Buyer.

“Some notable publishers have announced they will be moving all or a majority of their inventory to RTB,” he explained, but “compared to the online/desktop world, it is still a relatively small piece of the pie.”

Cohen is of the mind that the market will see the dramatic shift to RTB for mobile in 2014 — “the momentum is headed in the right direction,” he said.

Others also see greater utilization in the coming year.

There is a continued glut of available inventory that RTB can address, David Scatterday, senior product marketing for mobile atDG MediaMind, told CRM Buyer. “The presence of excess mobile inventory, particularly on the Web side, drives publishers to embrace RTB in order to monetize unsold supply at efficient price points.”