Could Real-time Ad Bidding Be Media’s Saving Grace?

In the book “Wait: The Art and Science of Delay” by Frank Partnoy, he explains the use of real-time day trading algorithms for the stock exchange. They have essentially replaced the traditional day trader as seen in the famous 1987 movie “Wall Street” with Charlie Sheen and Michael Douglas. Today, not only is technology bringing the young and impatient stockbroker to the top, but it is also bringing the young and impatient advertising executive to the top.

This concept of “real-time” has been felt across many different industries from public transportation schedules to just-in-time manufacturing. No more pronounced is real-time with the advent of breaking news via social media mediums such as Twitter. In the search, video, and display advertising world, real-time is affecting how organizations make online advertising purchases.

Torstar owns a company called EyeReturn Marketing, which is a real-time bidding service called EyeDemand. It’s so real-time, in fact, that President Renee Hill said that before partnering with the DoubleClick ad exchange (owned by Google) the company told them they had to bid within one-tenth of a second.

EyeDemand allows you to access top ad exchanges as well like DoubleClick ad exchange by Google, Casale Media, and appexchange.

Shaw, the CBC, and Rogers launched the Canadian Premium Audience Exchange back in mid-May which is an RTB network partnership of their own. TC Media followed that move by acquiring a majority stake in Redux Media.

EyeReturn’s vibrant President Renee Hill says that real-time bidding is about using data collected about you on the Internet to make the right decisions for clients. It can be a good thing to let advertisers have access to your browsing information because the ads are then more relevant to you.

Hill says that while other demand side platforms might be getting the advertiser a 6% clickthrough rate, EyeDemand can oftentimes double that rate to 12%, for example. Most website owners make money off advertising via click-thru rates or via thousands of impressions, so this can make a major difference.

Behavioural profiling is indeed rampant in online advertising today. If you post information on a site like Facebook, you will notice how the ads are targeted towards what you have made publicly available.

This can be useful, but also creepy. That’s why 20% of people in the United States currently have Do-Not-Track enabled. Hill however believes that strictly personal information should not be available for advertisers to track though.

The lines are blurred though when it comes to the difference between public and private information. What is the definition of personal information? If you go to Facebook’s Help Center the company says:

“Your name, gender, username, and user ID (account number), along with your profile picture, cover photo, and networks (if you choose to add these) are available to anyone. This is because this information is essential to helping you connect with your friends and family…In addition, anything you choose to share with a public audience (designated by the globe symbol in your audience selector) is considered public information. Learn more about using the audience selector to control who you share with each time you post.”

Given the above, perhaps there are very few pieces of information that can be deemed private anymore.

Hill says that real-time bidding hasn’t gained market share in Canada like it has in the United States. That’s certainly evidenced by the fact that 47% of all online advertising in the United States is done in real-time compared to just 6% here in Canada.

Hill also warns that click-thru rates, like comScore’s President Brent Bernie in late January, are not the only way advertisers should be measuring the return on investment of their ads. Time-viewed, whether the user interacted with the ad, conversion rates, and so on are other ways to measure beyond the click-thru.

Bernie further added that nearly 30% of display ads were invalid. Advertisers try to prevent the wrong ads showing up in the wrong places that can be harmful to a brand’s reputation. For example, an example of harmful advertising is when an ad shows up with a plane in it while you are reading an article about 9/11.

Torstar’s EyeReturn is good at being transparent too: not only have they allowed for the latter story about a controversial topic, but they have a mobile app that allows you to track how your campaign is doing in real-time.

Canada already has some of the toughest anti-marketing laws enforced towards consumers with Bill C-28 in 2010. Time will tell what the limits of behavioural profiling online are for advertisers in this country.

It should be noted though that advertising is one of the major sources of revenue for our struggling cornerstone media institutions. Considering that Torstar has been greatly successful, real-time bidding could be one of the saving graces of media companies that we love and know. That is as they struggle to turn a profit in these flux years between traditional, digital, mobile, and beyond.