Digging into Adap.tv's New Real Time Bidding Interface for Online Video Ads

Yesterday video ad management provider Adap.tv introduced a "real-time bidding" (RTB) interface for users of its video ad marketplace, which itself was launched this past February. I'm a big believer that innovations in online video advertising, plus massive online video viewership growth and adoption of convergence devices are together causing big future shifts in brands' ad budgets. RTB is another innovation that over time will help shift budgets. To learn more I spoke to Teg Grenager, Adap.tv's founder and VP of Product last night and have also spent some time reading up on how RTB is working in the display ad sector.

As background, ad exchanges give publishers the ability to expose their content and inventory to interested buyers who can use analytical tools in conjunction to allocate their budgets to better reach their targeted audiences. Exchanges are able to offer more pricing transparency to both publishers and advertisers, with the goal of improving ad performance and ROI. With exchanges, buys are placed in thousands of impressions sizes and in advance, based on anticipated targeting parameters.

As Teg explained, Adap.tv's new RTB feature improves its recently-launched marketplace by allowing ad buying at the impression level with dynamic pricing. The goal is to drive ad effectiveness even higher for advertisers, while still allowing publishers to retain control over their inventory. Teg likened RTB in the marketplace to a next-generation spot market. To use Adap.tv's RTB, the buyer (typically an agency) needs to integrate Adap.tv's API into their own trading desk technology, which as this article suggests are well underway at large firms like Publicis, Havas, The Media Kitchen and others. Once the Adap.tv API is integrated the buyer makes requests to connect with desired publishers for RTB, who in turn can accept or deny access. If accepted the buyer is then able to start bidding on available inventory, alongside other accepted buyers, creating the dynamic pricing environment.

Obviously all of the above is only worthwhile if a large number of publishers are offering inventory to the exchange in the first place and are subsequently willing to allow RTB. Teg said that 700 different properties are currently offering in-stream ad inventory to Adap.tv's marketplace, with hundreds of millions of available in-stream video impressions per month. Though this is only a fraction of the online video market, it seems like a solid start with lots of room to grow ahead. Teg noted that the buy side is in flux, with increasing pressure to be accountable to clients for targeting and ROI (things search marketing has excelled at). RTB caters to these needs.

Longer term the idea of both exchanges and RTB seem like very useful tools to further unlock online video ad spending and shift dollars over from TV. Still, with estimated total online video ad revenue around $1 billion/year, it is clearly early days for many agencies and brands. Many are still just dipping their toes into online video advertising to learn how it performs and will not yet be ready for such hands-on granular bidding. But as these brands and their agencies get more sophisticated, and for others who are already deeply immersed in the market, the idea of a robust ad exchange with RTB will likely be intriguing.

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Categories: Advertising, Technology

Topics: Adap.TV