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Rubicon Project research reveals global growth of automated online ad trading

Rubicon ProjectAutomated trading is on the rise around the world, according to research conducted by Econsultancy. Sponsored by the Rubicon Project, the advertising technology company, the report finds demand-side platforms taking 32% of media plans, and ad networks an average of 55% across US and Europe. Nearly a quarter (23%) of advertisers say they have moved budgets from search to display advertising in the past year. 

The growth of Real-Time Bidding (RTB) and the rise of the Demand-Side Platform (DSP)

  • The research, which questioned over 400 advertisers and agencies globally, reveals that more than a fifth (23%) of the advertisers and agencies surveyed say they use a demand-side platform (DSP) which takes an average of 32% of the media plan. 
  • This is highest in the US, where 39% of the respondents surveyed say they buy display advertising through DSPs.
  • An average of 34% of trading desk spend goes to real-time bidding (RTB): 41% in US and 34% in Europe.
  • However, the survey also reveals that 37% of responding companies say their trading desks spend less than 20% on RTB and that 17% of advertisers and agencies do not allocate any display advertising budget to their trading desks.

Performance and audience targeting remain key concerns

  • Of those advertisers using demand-side platforms, 82% use more than one DSP and 15% say they use more than four.  
  • When rating a DSP ‘performance’ is viewed as one of the three most important criteria by 75% of the advertisers surveyed, followed by technology (51%), audience (46%) and reach (35%), and improved targeting is seen as a key benefit of working with a DSP by 64% of advertisers. 
  • This is followed by real time understanding of campaign performance at 60% and the ability to buy at impression level for 53% of advertisers, with liquidity (lack of available inventory), cited as a challenge for over half of those surveyed (54%) and service levels an issue for 51%.
Curt Hecht, CEO for VivaKi Nerve Center comments: "As the leader and one of the first entrants into the RTB marketplace, this survey highlights the remarkable growth that we have seen over the past three years. Audience on Demand, our proprietary addressable media capability didn't exist at the beginning of 2008 and now we're delivering over 72 billion impressions, and it continues to grow. This still nascent marketplace has grown 85% since 2009, according to eMarketer, and there are some experts who predict it will reach $200 billion globally over the next few years, opening up huge potential for those who are poised to grow with the market." Jay Stevens, General Manager and Vice President International at the Rubicon Project, explains:“We’re seeing RTB on the rise as a viable new trading mechanic worldwide, and that the leading trading desks are using more than one DSP, ensuring that they aren’t putting all of their eggs in one basket.  The research also confirms what we see daily in the US and EMEA, with RTB-based demand growing at a healthy pace, whilst the amount of advertising spend going to ad networks remaining buoyant.  This further emphasises the need for publishers to adopt supply side platforms to properly manage all indirect sources of demand and implement sophisticated channel management strategies to deliver the highest overall yield.  RTB alone is no silver bullet.” Linus Gregoriadis, Research Director at Econsultancy, says: "The survey results reflect the huge transformation of the online display advertising environment since we last carried out this research two years ago. Advertisers and agencies have more opportunities than ever to target the right audience.  Ad networks and exchanges continue to prosper, while real-time bidding is having a major impact on the industry and is fuelling the growth of demand-side and supply-side platforms." Brandon Keenen, AOL adds: “The figures about the rise of ad networks certainly reflect what we are seeing at Advertising.com, where we have had double digit growth.  Increasingly advertisers are turning to us for improved performance, which reflects the findings of this research.” 

Online advertising networks continue to command significant spend

  • The research also reveals online advertising networks are receiving an average of 55% of the average media plan, up from 31% in 2009, when Econsultancy conducted similar research.  
  • Evidently, online advertising networks are seen as an important part of the media mix.  Of those advertisers working with ad networks, 43% say they work with at least five different ad networks compared to 30% two years ago. 
  • More than a third of advertisers (34%) buy from between five and ten online advertising networks - up from a quarter (23%) in 2009 - and 46% of advertisers say they are dealing with more networks than they were a year ago.  This is particularly high in the US with 53% of advertisers and agencies dealing with more ad networks than they were a year ago.
The main advantages of RTB are listed as improved performance, reduced media wastage, better targeting capabilities, and lower cost per acquisition.  Performance is also seen as the main advantage of ad networks with 79% of advertisers citing this as one of their top three criteria for rating an online ad network. The importance of reach has declined since 2009 however, when 67% of survey respondents highlighted it, which could be because of the growth of DSPs providing near total reach of the available inventory in key markets. This is Econsultancy’s second Online Advertisers Survey Report, produced in association with the Rubicon Project.  The study, supported by the IAB UK, IAB France, IAB Europe and AOP, follows a similar piece of research carried out in 2009 and is based on a survey of over 1,000 online advertising professionals carried out in August and September 2011.   This report is specifically focused on results from more than 400 advertiser and agency respondents. A copy of the full report can be downloaded here.

About the Rubicon Project

the Rubicon Project launched in 2007 with a mission to automate buying and selling across the $65 billion global online advertising industry.  Powered by data-driven algorithms and pricing intelligence data, REVV, the company’s yield optimization platform, has optimized nearly two trillion ad transactions for more than 450 of the largest properties on the Internet. REVV helps premium Web publishers like Time Inc., News International and CareerBuilder make more money by optimizing their ad space, eliminating unnecessary ad operations costs and protecting their brands.  The platform powers the REVV Marketplace, the world’s largest premium display advertising marketplace.  More than 650 ad networks, exchanges and DSPs access premium inventory and audiences through the REVV Marketplace and its unparalleled reach of more than 575 million unique users.  Headquartered in Los Angeles, with offices in New York, Seattle, London, Paris, Hamburg and Sydney, the company is backed by $60 million in funding from Clearstone Venture Partners, Mayfield Fund, IDG Ventures Asia, Comcast Ventures and News Corporation. Rubicon Project is an Associate Member of AOP. AOP Members can submit press releases here in our members area (login required.)

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