Quitting Cold Traffic In RTB’s ‘Wild West’

September 25, 2014

Last week, Mediapost‘s Tyler Loechner got the lowdown on the RTB marketplace from Tapstone CEO, Jonathan David. We’d love to hear your responses:

“If you’re dealing with cold traffic — traffic that has not already been qualified with a direct site visit — I don’t necessarily think that open RTB exchanges have the quality of inventory of quality of targeting available to be successful, if the goal is to drive a response,” said Jonathan David, CEO and founder of digital media-buying agency Tapstone.

By “cold traffic,” David means any type of open exchange-based buy that isn’t retargeting. The traffic is “cold” because you’re reaching out to consumers that haven’t first reached you. In that regard, David thinks RTB suits the retargeting industry, but when it comes to the audience-based buying via RTB many envision, he just doesn’t see it yet.

“I think [programmatic] is the Wild West,” David said. The sheer numbers of players — publishers, supply-side platforms, agencies, trading desks, demand-side platforms, other tech vendors and the advertiser themselves — leaves room for “nefarious behavior.”

“There’s no incentive for a publisher to clear their best quality inventory through an open RTB exchange at the moment,” he asserted. As a result, David claims that the number of “savvy advertisers” he knows are not scaling “in any meaningful way in open RTB.”

As you likely know, David is not the only person in the space that doesn’t believe open exchanges quite are “there” yet. GroupM announced this summer that it would pull out of the open RTB marketplaces by years end. And industry trends are doing some speaking, too.

A recent AOL report notes that 32% of publishers are currently operating private video ad marketplaces, up from 20% in 2013. Of the 68% of publishers not currently using a private exchange, over half (55%) plan to do so in the next year.

David acknowledges that “more and more publishers are clearing more and more of their inventory through programmatic exchanges,” but said he is waiting for a “tipping point” to occur in which the “quality of inventory and quality of data catches up with the accuracy in targeting and quality of inventory associated with placing a direct buy.”