Real-time bidding (RTB), the process of evaluating, bidding on and buying ad inventory on an impression-level basis in real time through online ad exchanges, is exploding—projected to grow 38 percent year over year and represent 22 percent of all digital display ad spending this year, according to eMarketer's latest forecast.
A key reason is that this auction-based marketplace enables advertisers to more cost-effectively reach their target sets online by buying audiences vs. specific web sites, which can significantly lower CPMs vs. traditional publisher-direct (site-specific) media buys.
So what does this mean to event marketers? Well, let's look at a hypothetical example of a show that does not employ RTB and compare it to one that aggressively leverages it.
Let's say that you and a show you compete with have both allocated $25,000 of your attendee marketing budgets to online display advertising.
For purposes of this example, let's use an average publisher-direct CPM of $25 and an average RTB CPM of $2.50. Though publisher-direct CPMs and RTB CPMs vary widely, these are both solid working numbers from actual campaigns my agency has run for clients' shows.
Yes, the RTB CPM is much lower because you are tapping into a much bigger ad inventory pool, potentially thousands of web sites vs. traditional publisher-direct ad buys that focus on a relatively limited number of sites. That is the point here.
In this example, your show focuses 100 percent on publisher-direct ad buys so, for $25,000, you can buy 1 million impressions based on an average $25 CPM.
Let's say your competitor is running a 75-percent RTB/25-percent publisher-direct allocation against the same $25,000 budget, which translates to $18,750 for RTB ad buys and $6,250 for publisher-direct ad buys.
Based on the CPMs above, your competitor will acquire 250,000 site-specific impressions with their $6,250 allocation and 7.5 million RTB impressions with their $18,750 allocation.
Their total impression buy would thus be 7.75 million vs. your 1 million so, in this example, RTB gives your competitor nearly eight times more digital exposure than you. Based on the increased exposure, who do you think will have a better chance of getting more attendees from their digital ad spend?
The deltas will of course vary based on the CPM inputs and RTB allocations, but this example should clearly demonstrate why the impression differentials can be substantial.
Publisher-direct ad buys are still an important part of my agency’s ad buying model and the tens of millions of impressions we buy for our clients' shows. We buy ad inventory across the price spectrum, and routinely pay double-digit CPMs for publisher-direct ad buys to reach certain audiences.
However, as we continue to optimize our impression portfolios, we are moving more and more dollars to RTB, and perhaps your competitors are too!
Cristopher Levy runs Encore Media Partners, an audience strategy, marketing and media buying agency, which specializes in “live” exhibitions and events. Connect with him on LinkedIn or at firstname.lastname@example.org.