Singapore-based DSP (demand-side platform) Brandscreen recently released its first quarterly Real-Time Media Insights Report, based on analysis of data stretching back nine quarters. CEO Stuart Spiteri shared four key insights, including findings from the report, as well as his own convictions about where RTB (real-time bidding) is headed in Asia-Pacific and why brands can't afford not to get onboard.
The revolution is just beginning
The use of programmatic buying is growing impressively in the region. For example, both impression volume and spending are up more than 80 per cent year-over-year in Southeast Asia, according to Brandscreen's report.
At the same time, the inventory pool is becoming broader. While Google accounted for 86 per cent of impressions in 2011, its share fell to 40 per cent in Q3 as other exchanges accounted for larger proportions of the total.
These signs point to a healthy, progressing market, and Spiteri believes the growth is just beginning. "The insights that can be gained from the application of big data in this space are mind-boggling," he said. "There's too much to be gained for CMOs and ad buyers to not feverishly, whole-heartedly embrace programmatic."
Spiteri drew an analogy between the rise of digital communications and the rise of programmatic buying. Once upon a time, fax machines were cool technology and enjoyed rapid adoption. But in essence they merely sped up an antiquated, manual form of information exchange. The "titanic, transformative change" came when email and other digital technologies gave people novel, more collaborative ways to communicate, Spiteri said.
"This is analogous to the media space," he continued. "Everyone's selling everything manually. But it's my deeply held conviction that programmatic is going to do to media what digital communications did to collaboration. There is no reason that every single piece of media can't be bought and sold programmatically." And he does mean everything, including TV slots and OOH.
Local inventory performs better
Brandscreen is working to secure access to as much local inventory as it can get its hands on. According to Spiteri, the company has "locked down" Baidu (in a deal announced yesterday), Tencent, Alibaba and Sina in China, as well as several Japan-specific exchanges.
Why? Local inventory performs significantly better than globally held inventory, he asserted.
"The global exchanges struggle for the local—APAC/Japan/China—inventory that Brandscreen has," he said. "Availability of local sites increases opportunities for advertising, and for better managing recency and frequency. Brandscreen has the relationships to get the local inventory and leverage the local site data for better results."
To elaborate on how access to local site data confers advantages, Spiteri gave an example regarding Baidu. When Baidu sends a bid request to Brandscreen, it includes search-intent information. If a user has searched for, say, digital cameras, Brandscreen's platform can better match that user—through the RTB auction that takes places in less than 100 milliseconds—with an advertiser willing to pay more to target someone who is interested in cameras. "We're able to provide a stair-step change in the performance of those campaigns," he said.
To be clear, the capability to utilize such data is not unique to Brandscreen—all DSPs do so to varying degrees, and they all maintain, as Spiteri does, that their way of doing so is superior. Spiteri's argument above is that Brandscreen has forged more and better partnerships with local sites to get that data into the company's 'black box' in the first place. "Only Google provides this information, and not in China," he said. "Brandscreen is the only global provider that can offer this in China."
The company's next quarterly report will provide further proof of how well it works, Spiteri indicated. "Now that Chinese suppliers are up and running with RTB, they are outpacing the rest in how those campaigns perform," he said. "That's why we're so much more interested in placing money on local inventory sources."
Smart marketers avoid the herd
Brandscreen's data analysis revealed an interesting, real-world-based quirk that marketers and ad buyers can exploit to get higher-value impressions for less money—a small example, Spiteri said, of the kinds of insights available for the picking in the programmatic universe.
Because of the traditional way budgets work, ad exchanges see a "crescendo" in buying activity through the course of each month, as well as through the course of each quarter, culminating in massive competition for inventory—and thus higher prices—toward the end of a month/quarter. "And then suddenly, on the 1st of the next month, there is a dropoff, because new campaigns are not yet loaded on the system," he said.
Buyers willing to march to a different beat can avoid overpaying by reducing their activity during the frenzy, or score premium impressions at lower cost during the lull (or both). "You can sometimes pick up the same inventory for half the price," Spiteri said.
Think vertical commerce
Spiteri cited programmatic commerce as one of the industry's next big evolutionary changes. The concept, he explained, is to combine data specific to a certain vertical, such as cars or travel, along with auction algorithms (the secret sauce of any DSP) written to suit that particular market.
"We and our peers have all been selling the same things to the same people," he said. "What we believe is, by assembling our capabilities and data, we can turn the industry on its head…. We can bring different data sets to bear on those markets to help brands run better campaigns on our platform in real time."
For example, rather than optimizing based on CPC (cost per click), a campaign for a credit-card company might optimize based on the lifetime value of the customer. By marrying data sets—such as credit-score averages within geographic regions—to more nuanced understanding of what brands in a certain vertical are looking for, Spiteri believes programmatic commerce can deliver more of the exact customers a brand is seeking.
Spiteri, apparently fond of analogies, concludes by referring to the 1960s, when SABRE started automating the travel market. "It started with low-value inventory; now it powers everything." Likewise automated stock trading began with Nasdaq penny stocks because the system was new and untested.
"We're at the same point with automation of media," he said. "It's baby steps at first. But every day there is more trust and measurement, and more data to add to impressions, driving results and increasing CPMs."