In continuing our discussion on video RTB, check out part one and part two to quickly get up to speed, we’ll dive into the two distinct buying models Forrester Consulting found as they evaluated the online video RTB market.
Bid-Based Exchange Buying
The easiest way to think of bid-based exchange buying is to look at it as an auction. Bid-based exchange buying is the typical method of buying online video inventory programmatically. Through this method buyers have access to millions of in-stream impressions which they can compete for via an auction, where each buyer can place a bid on individual impressions based on what they decide is worth the most value. Buyers will consider the full path of where the placement occurs, location, contextual data, audience data placement details (duration, user vs. auto initiation, etc.) and other targeting criteria to make this decision.
While mid to long-tail inventory is prevalent within the exchanges, premium publishers are beginning to utilize programmatic buyers as an extension for their direct sales team. As a result, they're curing greater yield and fill while not accruing overhead costs typically associated with expanding their direct sales teams.
Direct Deals and Private Exchanges
Think of this situation as the “buy it now” price. It works extremely similar to bid-based buying, but without the ambiguity of price and availability. This model works best for advertisers looking for ad formats not available via RTB (like home page takeovers or sponsorships) or those that require volume guarantees. Basically, buyers in the online advertising market are rewarded with access to high quality, targeted ad inventory and in exchange publishers (those selling the ad space) get to control their own prices.
No matter which of these two models are preferred, there is no denying that video RTB is exploding in the online advertising market. By targeting specific viewers and offering lower prices to advertisers, it’s clear that RTB in the online video marketplace is rapidly becoming the next big medium in advertising.