REPORT: This Technology Will Change Digital Advertising

This post is sponsored by The Trade Desk.

Running an auction in less then one-tenth of a second is solving a lot of advertising problems, billions of dollars at a time. But in most major ad campaigns, there are still situations where planning ahead is critical. As Jeff Green, CEO of The Trade Desk, puts it, "Would you wait to buy your ad slot for the Super Bowl until the day of the game?"

The answer, of course, is no. Big-ticket ads such as those are at the center of a media plan, and they require certainty. The central dilemma in the Super Bowl analogy is real-time advertising's biggest challenge: There are almost no guarantees in real-time bidding. The promise of RTB lies in its granular audience targeting, but buying ad space in real time doesn't offer marketers the traditional assurances of key inventory, which is often seasonal.

Green believes that, for programmatic to grow beyond the almost $5 billion RTB industry it is today, it will have to find a way to spare marketers the difficult choice between sophisticated targeting or upfront guarantees. He's convinced there is a way to have both.

The tide may be turning in his favor. A recent report published by research firm IDC projects that RTB with guarantees - "direct ad sales in RTB," also known as programmatic guaranteed or forward markets - will be a $14.2 billion market by 2018. Karsten Weide, IDC's vice president of media and entertainment, sees this method as the way of the future, saying, "By applying RTB technology, forward markets automate, integrate, and optimize the trade and delivery of display advertising inventory, which today is in large part still manual and hugely inefficient."

Green offers another example. "Back-to-school is a major pulse for retailers, but not all people online in the fall are back-to-school shopping," he points out. "Programmatic guaranteed fills a gap: Retailers need to reach their right audience on an impression-by-impression basis, but they need the promise of guaranteed placements at crucial moments for perishable inventory. RTB still has to evolve to win more of the $600 billion spent in all of advertising globally each year."

Weide and Green believe that, for the programmatic advertising industry to grow, it needs to offer more than what agencies and publishers enjoy today. For agencies, adoption of premium RTB trades is a "no-brainer," says Weide, especially once you add in the flexibility and guarantees of the forward market.

But advertisers and publishers who have resisted change or cut DSPs and RTB out of their workflows are making a huge mistake, says Weide. Riding this wave of efficiency is both good for publishers and necessary for their survival. And since the programmatic forward market represents the best of the old and the new, advertisers and publishers need to embrace it now - or, according to Weide, they'll "risk becoming obsolete" by those who do.

To learn more about IDC's findings on programmatic guaranteed, download the white paper online.

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