2013 was a banner year (pun intended) for programmatic media. Both participants in the ecosystem and the systems/platforms they are leveraging are starting to evolve as mechanisms for efficient deployment of performance-oriented ad dollars. eMarketer estimated nearly $3.4 billion in programmatic spend being delivered in 2013. RocketFuel's IPO, Criteo's IPO, Rubicon's announcement of a pending S-1, mergers, acquisitions (SiteScout/Centro), and massive growth continues to demonstrate the power of programmatic media. But most of these firms are associated with DR advertising. Even private exchanges these days aren't proliferating due to a lack of brand dollars in the RTB ecosystem.
This is the classic chicken and egg of media: inventory that brands want on a site and that offer unique customization isn't readily available in programmatic channels, so brand dollars aren't moved quickly into programmatic channels, which in turn keeps out the very inventory that brands want. CPMs stay depressed, inventory remains out of the channel, and so do branding campaigns. It's the media equivalent of the prisoner’s dilemma.
Scale was never a problem with programmatic media; as FBX and Twitter add more inventory to ecosystem, they join the ranks of exchanges everywhere who pool together billions of impressions each day to give buyers flexibility in how they reach the right user in the right place at the right time. But the available scale just doesn't seem to be the right mix for branding campaigns, and thus the argument of RFP vs. RTB continues.
However, change is in the air. And that change will be the central theme of 2014: the year in which RTB comes to mean real-time branding. Market forces are aligning and technology is evolving to allow for both sellers and buyers to create real-time marketplaces for branding campaigns. And these forces will create another year of hyper-growth in programmatic media. Let's look at these forces and how they are converging/intersecting to allow for the coming wave of real-time branding innovation:
Real-time branding means the influx of ad dollars that will force publishers to place premium impressions in programmatic platforms -- large ad sizes, customized units, higher CPMs -- and therefore the chicken/egg, prisoners' dilemma problem becomes a virtuous circle of programmatic growth and continued accelerated adoption.
CORRECTION: This post incorrectly states that Rubicon had announced a pending S-1. No such announcement has been made. MediaPost regrets the error.
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