This post is sponsored by The Trade Desk.
Real-time bidding (RTB), a method of selling and buying online display advertising in real time, is one of the fastest growing areas of digital marketing. According to the International Data Corporation, worldwide real-time bidding-based spending is expected to reach $US20.8 billion in 2017 — which is a big jump from the $3.2 billion spent in 2013.
Jeff Green is CEO of The Trade Desk, a leading platform that allows advertisers to buy specific audiences on an impression-by-impression basis. He recently talked to us about how programmatic buying and RTB are influencing the industry, from the 2016 elections to print ads — and how Don Draper’s job is about to change.
This conversation has been lightly edited for clarity and length.
Can you tell us a little about your background, and how you became interested in the programmatic and real-time bidding space?
Jeff Green: I was one of those guys who changed his major 50 times, and then had 97 jobs after college. I somehow landed a job at an ad agency. In a short time, I was running the media department in a small agency in L.A. I had this idea in 2004 to leave the agency and start a business with a few others. That business grew into AdECN, which was the first ad exchange [later acquired by Microsoft].
In 2007-2008, when companies such as AdECN and Google made RTB a reality, all of us became focused on programmatic. Our goal has always been to make the ad ecosystem a healthier marketplace, which meant making it look more like the stock market, which makes the world more programmatic.
Can you describe how The Trade Desk’s platform is built differently?
JG: What we decided to do when we left Microsoft and created The Trade Desk is to focus on the buy-side platform — just on the technology. We don’t compete with our clients at all. The most important thing that distinguishes us from them is we have no limit to how descriptive you can be in targeting who, what, when.
What’s a real-world example of The Trade Desk’s “limitless targeting”?
JG: Let’s say I’m running a campaign for the Democratic Party in November 2016. What you would likely enter in another platform is, “I’m targeting Ohio voters, and people that have come to this website before.” In our platform, you can share a different message with every voter in Ohio. You could slice the segments differently, so you can pay a different price for every county. You can pay a different price if they’re a Democrat, or a Republican, if they were once Republicans and are now Democrats, if they’re a gun owner, or 27 years old. Every single attribute is considered, so long as it’s clicking the button a few more times to create descriptiveness, or as we call it, “expressiveness.” The level of expressiveness is the biggest differentiator of our platform.
Will real-time bidding have an effect on ad buying for the 2016 presidential election?
JG: Undoubtedly. We already represent multiple political agencies on both sides of the aisle. In the same way that Obama spent 10 times more than Romney on social media, in the same way that the Obama campaign outspent the Romney campaign — I think it’s pretty safe to say that had a substantial impact on the election. I fully expect that programmatic will have as much if not a bigger role in deciding the 2016 election.
There is real power in targeting and control of RTB and programmatic that never was present in elections before. There are scenarios where it can be the difference: By targeting the exact best audience, at the moment that audience is ready to be reached and influenced, you’re looking at swaying the votes of the very prized few who matter the most.
What new developments in real-time bidding do you anticipate in the future?
JG: I expect that the rest of the advertising ecosystem is going to look more like real-time bidding than it has historically. For instance, the $US320+ billion that is spent on a global basis annually on television advertising is bought in a pretty prehistoric way compared to what we do in RTB. There’s no reason why it can’t or won’t be sold programmatically. In my opinion, it’s only a matter of time.
To get really crazy for a second, I actually think print should be bought and sold programmatically. In print, there is a massive bottleneck — fax machines and insertion orders slow down the purchase of ads. It’s really hard to know what you’re getting. As magazines add more and more ads, and they get thicker and thicker, and colour printing gets cheaper and cheaper, it becomes harder to understand the supply and demand. And it’s part of the reason, I think, why print has struggled. It’s not because it’s not a valuable medium; it’s because transacting in it is hard. And as programmatic makes it possible to examine more criteria and create more awareness of what’s being bought or sold, there’s no reason why phones or fax machines need to be involved.
What do you see as current and future challenges in real-time bidding?
JG: The lack of guarantees is definitely a big issue. The second biggest issue is a dearth of talent to understand RTB. As that world evolves, for agencies that have hundreds of thousands of employees, it’s a massive cultural shift. And while many of them are trying to keep up, companies like ours continue to innovate and create change, and that’s hard for any company to keep up with — especially the big ones. There’s a big burden on companies like ours to teach the world to trade, to buy and sell more efficiently than what they’ve done historically.
How do you think real-time bidding will affect sales forces in the future? What new sorts of jobs and skills do you see developing?
JG: The world we’re evolving toward is one where people are more involved, not less involved. When you get a world with more data and more insight, you need more people to analyse it. You need more people to make decisions.
Before, Don Draper didn’t have to prove anything — all he had to do was be some blend of charismatic and authoritative. In our world, we can measure everything. It just changes Don Draper’s job. Now, Don Draper has the ability to make more informed decisions. He has a team of analysts who are producing more data to sift through so they can make better decisions. There are more opportunities than there ever have been, because we can all be more effective.
It’s not to say that you don’t have to be charismatic, and agency guys tend to like whiskey just as much as they did in the 1960s. But the game has changed. Because you can measure everything, you can prove and disprove almost any marketing theory you have. There will be more data-driven jobs — that’s where the biggest growth in our space will come from. But every other segment will grow as well.
So in this brave new ad world, RTB rules.
JG: Real-time bidding and programmatic has and will continue to change the way that advertising is done. Period. It is impossible to stop. You either lead efficiency, or you get run over by it. It’s something we’ve said in our company again and again. There’s so much opportunity in front of us, we just need to be running as quickly as we possibly can.
Advertising will continue to change. And the only long pole is getting publishers and agencies and advertisers to wrap their brains and their cultures around a world that looks very different from the one Don Draper grew up in.
To learn more about The Trade Desk, visit their website.
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