RTB is causing a major paradigm shift in how online ads are bought and sold, says Michael Smith, vice president of revenue platforms and operations at Hearst Magazines Digital Media. He compares RTB’s importance to when search marketing first came out. Long-term, all media will be purchased through RTB, Smith predicts.
“It’s too compelling a technology for marketers and advertisers not to harness,” he explains. “In RTB, more of the ad decisioning happens on the buyer’s machines than on the seller’s machines. It’s a very useful way to buy advertising, when you can make a decision about what price to pay for a user in the moment.”
At Hearst, RTB complements the media outlet’s existing full-service sales efforts, and Smith thinks that its role will grow exponentially.
At Hearst, advertisers buying non-guaranteed RTB units on the private auction actually pay more on a CPM basis than full-service guaranteed instertion order clients, which is atypical elsewhere. Why? The buyer is not making a volume guarantee. “Full-service non-guaranteed business is sold at rate card,” explains Smith. “We sell a lot that way. It’s a good product for buyers, who don’t want to make a guaranteed commitment, but are willing to pay a premium rate for the selective impressions that they want to serve.”
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