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When Will Traditional Media Embrace Real Time Bidding and Demand Side Platforms?

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The online publisher, RTB, DSP, Ad Exchange, horizontal and vertical ad network, data, verification, optimization and tools business is not an easy maze to navigate. There are at least 15 leading online DSPs (Demand Side Platforms) including MediaMath, InviteMedia, [x + 1], TURN, Data XU, appnexus, Efficient Frontier, Triggit, XA.net, AdBuyer.com, Trade Desk, Lucid Media, BRANDSCREEN and Adchemy.

Most of the leading agency holding companies have established technology-based media buying platforms within their media groups, and have developed, invested in, or partnered with DSPs. WPP has launched B3, a DSP focused on real time bidding for both online and mobile ads. rVue is a DSP focused on digital out-of-home media. MediaBank recently announced the development of a DSP targeting more efficient buying of traditional media inventory. YieldVision is a European-based agency using DSP technology for direct response media buying. DSPs are taking hold globally. In response, Real Time Bidding is gaining traction.

DSPs use sophisticated algorithms to optimize their online display advertising buys by enabling them to buy display impressions across multiple ad exchanges. The emerging interface between venture funded enhanced selling tools (Real Time Bidding) and agency funded and supported competitive buying tools (DSPs) represents an important giant step forward for automated media transactions that could easily be adopted for traditional media. Google and others have unsuccessfully attempted to bridge the chasm between online and traditional media buying and selling technologies.

But while traditional media companies will continue to actively resist this move for their traditional inventory, they will be forced to adopt supply side and RTB platforms for their digital inventory management. Incorporating unsold traditional inventory into this model may soon be mandated by agencies, which are eager to build greater cost efficiencies into both their own business practices and their media purchases made on behalf of clients. With long-term demand for newspaper, radio and local television inventory on the wane, a handful of traditional media companies will inevitably make the leap to online transactional selling and potentially transform the business.

If Real Time Bidding proves to represent a viable competitive balance for Demand Side Platform buying, then a widespread shift to online transactional management of media buying and selling for a high share of both online and offline media inventory may become a reality within the next 48 months.

PubMatic recently conducted a study in collaboration with four leading DSPs and, according to CEO Rajeev Goel, established that publishers generated significantly higher revenue from RTB campaigns in comparison to Non-RTB campaigns, across all advertising verticals. New tools that help balance the leverage points between buyers and sellers will inevitably lead to greater technology-based transactional integration of media buying and selling.

Jack Myers can be reached at Jack@mediadvisorygroup.com. JackMyersThinkTank is free and underwritten, as part of MediaBizBloggers.com, by subscriptions to Jack Myers Media Business Report (www.jackmyers.com). Subscribe free to all MediaBizBloggers reports at www.MediaBizBloggers. For Jack Myers Media Business Report subscription information visit www.myersreport.com or contact Jack Myers at Jack@mediadvisorygroup.com. Jack Myers and Media Advisory Group provide details on all underwriters and companies in which we have an investment at www.jackmyers.com. This post originally appeared at JackMyers.com.