200 people were gathered yesterday in the center of Paris to exchange on Ad trading. Obviously RTB was on everybody’s lips.
It’s always amazing to see that what took 400 years in the financial market happened in just 17 years in total online.
Most of these 200 people were there to share information on this revolution that’s leading to increased ROI for advertisers and increased revenue for publishers. We’re still at early days and even though we are already able to provide volume and performance, there’s still a significant need for education of advertisers and publishers. Our ecosystem is generating scalability in a French market of only €600M display money.
The fact that there are many companies educating and innovating helps our market grow faster than in the US where a very few players are dominant. The key challenges for the future are going to be:
- Increased transparency between advertisers, service providers and publishers. Advertisers already clearly see the value of RTB, and most of the advertisers confirmed that they plan to increase their investment in RTB in the coming months. Education of more advertisers is key.
- Operational efficiency in managing campaigns. Managing not only pure retargeting but evolving to the management of advertisers marketing segmentation needs and offering users a richer experience when exposed to RTB display advertisement.
- Evolution on data
For us, the key success factors in this ecosystem will be:
1. People
2. Technology
3. Data
All of these factors have always been critical for us at sociomantic and we’re proud of being part of one of the fastest growing internet companies in Europe. As Pierre Emmanuel Cros, MD from Performics stated, it’s not about being specialists or generalists, it’s about who will provide the best performance for both the advertiser and the publishers. In our space, technology is critical — and that’s why we invested so much into it.
Beyond education, two areas of our ecosystem will need to evolve. The first one is Third party data. While at sociomantic we’re focus on customer first party data (for example CRM data) and our own data aggregation, there are several players on the market coming from offline or purely online offering third party data. They have great experience in aggregating social/demographic data and offer interest and purchase intent information. For a few players, those datas are aggregated on websites they’re working with, analyzing the content of the pages, creating clusters and defining target groups. For a few, those datas are aggregated offiline and historical players claim to offer up to 600 criteria per individual. There are still two questions around that. First is the lifetime value of purchase intent, for example. If I go to an e-shop, looking for a pair of shoes, how long will it take me to buy them on or offline? The other question which is critical to our industry is the business model that the data providers are offering to access the information. Interestingly enough, when the question about the business model was asked to the panel of four people at ATS, they looked at each other and didn’t really answer the question. Third party data is another milestone for our industry. The question is who will get this data — will it be the DSP like us, the SSP, the publishers?
The second area is the publishers themselves. Many publishers see already a significant increase of the display revenue coming from RTB. The vast majority of publishers still maintain a differenciation between a ”premium sales team” and what’s still called ”unsold inventory.” They still differenciate based on what’s sold and what’s not, not analyzing the precise revenue generated and preferring not to generate revenue on what’s considered as ”premium placement.” At the same time, publishers are expecting RTB to help them gain market share back from SEM and to attract back advertisers that have left the display side in the past years. They also recognize that there’s no cannibalization today between RTB and branding. We’re more in a unsellable by the internal sales team environment than a unsold environment. What RTB is achieving cannot be achieved by direct sales team with the traditional insertion order. RTB is bringing value in the display environment.
I used to run a publisher. At Bestofmedia, I had to outsource production of content to other countries due to the lower CPM achieved on display. Our ”unsold” inventory was sold at far less than what RTB is generating. The potential of the RTB market is too huge to prevent publishers from offering transparency on URL on the SSPs and adexchanges, and not to open their inventory, allowing us to start generating revenue for them. The coming year will be exciting. We should be entering back in a virtous circle in which publishers are able to invest more in content due to what RTB will generate. Direct sales teams will concentrate on special operations and special format that RTB technology cannot offer today.
ATS Paris was great. I hope that for the next session, even more advertisers will attend, leading to an event at which we can also exchange on customer performances and advertiser requirements.