Real-time bidding (RTB) is a small, but rapidly growing part of the overall display advertising market, which is billed as a way of giving agencies and advertisers better control of their ad buys and costs.
Last year eMarketer predicted that RTB spend in the US will reach $7.1bn by 2016 - nearly a third of the display ad market - up from $1.9bn in 2012.
However RTB also receives criticism for being too complicated, overly expensive and offering poor quality inventory.
With this in mind, AdMonsters and Pubmatic have published a new report that examines publisher attitudes towards RTB.
AdMonsters distributed an online survey to its European publisher contacts and carried out several in-depth interviews with experienced RTB users in both the US and Europe.
It found that there is still some work to do to convince publishers of the benefits of RTB, as just 20% of respondents accept ad placements via RTB compared to 62% of advertisers who had tried RTB at that point.
The report also focuses on why the technology is more popular in the US than in Europe.
The most common reasons for the difference in attitudes to RTB are detailed below, but you can also find out more about this topic in our Real-Time Bidding Buyer's Guide and in this blog post detailing the expert's view on the truth about RTB...
1. Fragmentation of the European market
One of the most common reasons cited by respondents was that there are smaller online inventories available due to the fragmentation of the European market, where advertising targets and content are very localised.
According to the report, RTB thrives on large volumes of inventory and a high number of bidders, so the lack of available ad space seriously hampers the effectiveness for both advertisers and publishers.
One publisher said:
CPMs are still too low, and there aren't enough buyers to create the demand and push the prices of the inventory sold to a level that we'd be willing to trade at.
Fragmentation of the European market is also reflected in the relationships between buyers and sellers, which can vary from market to market.
Automation will likely be met with resistance in regions where buyers have unique ways of negotiating media buys. For example, RTB cannot easily address discounts and other arrangements often made between agencies and publishers.
2. Lack of resources
Though RTB is an automated process, it still requires resources and expertise to effectively integrate the technology.
Many of the publishers interviewed as part of the survey said they haven't tested RTB as they lack the necessary resources to implement it.
This was one of the points highlighted in our RTB Buyer's Guide. It states that both advertisers and publishers are still reluctant to invest time and resources to understand the advantages of using these platforms and how RTB can help them optimise campaigns and increase yield.
Similarly, while demand-side platforms will act as system integrators, new roles (e.g. Ad Trading Specialist – ATS) will be needed to bridge the gap between technology and agency teams.
3. Privacy concerns over publisher data
According to the AdMonsters report, European publishers tend to be more concerned over the impact that RTB will have on data privacy than their US counterparts.
It suggests this is reinforced by the fact that the EU doesn't yet have uniform data privacy standards.
4. Reliance on long-term contracts
Respondents pointed to the propensity in Europe to enter into long-term tech contracts as a reason for RTB's failure to match its growth in the US.
Similarly, there is apparently a cultural reluctance to switch providers based on unsatisfactory performance in case it's perceived as a failure on the part of whoever agreed the contract.
Telegraaf Media Nederland yield manager Martin van der Meij said that companies tend to be locked into tech contracts for a year or longer, so the time it takes to switch suppliers causes reluctance to sign up in the first place.
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