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Man vs. machine: Real-time bidding’s growing pains

Real-time bidding (RTB) for online display ads can help marketers target customers more effectively and efficiently, but the automated buying system may also cause them to lose something essential to the marketing process: human contact.

That sentiment was expressed by both buyers and sellers in a survey sponsored by Index Platform, a provider of RTB services. Eighty-four percent of sellers expressed concerns that RTB would commoditize their inventories, while 77% of buyers said they would spend more on RTB if there were a greater emphasis by sellers on the quality of impressions. Advertiser Perceptions conducted the survey of 105 senior–level publisher, brand, and agency executives in the United States.

Real-time bidding allows greater use of analytics to buy individually targeted impressions almost instantaneously. While RTB was involved in less than 1% of all online display buys in 2010, it is growing at double-digit rates, according to eMarketer, which predicts it will account for more than a quarter of all purchases by 2015. Quality of inventory, however, continues to be an RTB concern among both buyers and sellers.

“There are more impressions available than can ever be bought, something on the order of 500 billion a month. A major publisher may have 50 million of those impressions, and if only machines are finding that publisher, it’s never going to work,” says Andrew Casale, VP of strategy at Casale Media, which owns Index Platform.

The upshot, Casale says, is that publishers don’t get an opportunity to market quality content and advertisers get stuck with poor-performing impressions. “Machines will take away a lot of the mindless work, but human beings working together can make intelligent decisions that machines will never get.”

Publishers and advertisers also agree that RTB will become a big factor in online display sales very soon. Both groups reported that only 6% of ads were transacted using the method a year ago, but that nearly 20% of the volume will be real-time bids one year from now.

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