First, no one told the publishers, which have more conservative estimates of how much of their inventory will transition to bidded over the next year or so. The predictions I've seen show the needle moving from 25% to 31% this year and slightly more the next. It makes Google's numbers sound like inwardly-focused hype.
What's more, publishers still see the bidded marketplace as the place for their remnant, or least desirable inventory. Findings released in December by DataXu and Digiday also reveal that publishers believe real-time bidding has hurt their client relationships. All these ROI concerns don't sound like the kind of zeal or commitment needed to fuel the growth predicted by Google and other ad industry zealots. The truth is bidded media is hitting a few speed bumps on the way to taking over the world.
Most buyers within agencies I've talked to say that they know where to get mass and that inventory is not the problem that has to be solved by DSPs. While they may have more inventory at their fingertips, which is super, they are still waiting for this holy grail of audience intelligence at scale. Such abundance would include being able to access unique audience profiles and do things like layer Prism data, for truly applicable intelligence output.
Before this space can thrive at scale, we must see buyers going forth in droves and calling the whole thing indispensable. I've spent a lot of time talking to management teams at networks and DSPs about their sellable value propositions, market identities and sometimes their opportunistic reinvention. It's an exciting time. In those conversations -- the promise rings true. It's doubtless to me that we are heading in this direction.
Finally, there is the new, nagging question of accountability. Some say that DSPs are creating this new arbitrage with agency/brand dollars, but in the absence of accountability. A friend in the space recently whispered to me, "What if the industry knew that 30% of their DSP ad spend went to the DSP before any networks or others were paid?" The early days of Search come to mind. Those in that space then may recall the fixed aggregate CPC model. It's gone away, having raised too many uncomfortable questions about misuse of currencies, as increasingly large margin passed hands. While not a direct analog, it serves as an historic reminder that the business model will need levels of regulation.
As with all past promises eventually realized, this one benefits from a more sober view. Bold proclamations play the part they've always played in our industry -- to marshal our collective attention and get things going for real.
|ABOUT THE AUTHOR|
Kendall Allen is a VP for Laredo Group, a leading training and consulting firm dedicated to helping clients increase sales and decrease costs through knowledge and efficiencies related to online advertising buying and selling, digital marketing and media. She is based in New York.
Conversion marketing isn’t just a trend or tactic. It’s a fundamentally new way to approach marketing -- yet it’s based on the most timeless of principles: that the key to success in business is to drive sales today, while building stronger brands for tomorrow. Brought to you by Catapult.Learn more