RTB, as defined by Parks Associates, describes the automated process of buying and selling online display advertising in real time, and it incorporates enhanced solutions in targeting algorithms and data analytics in order to deliver better targeting, greater control and more granular campaigns.

Given these strong benefits to ad buyers and sellers, RTB is starting to claim more revenues in the online advertising industry, and by 2017, it will account for 34 percent of all online display ad revenues.

Several industry factors will drive this shift to RTB. New technologies have introduced a variety of challenges to advertising companies. Consumers can skip commercials or go completely “over-the-top” in their video viewing, and they are now using multiple screens to consume content. Parks Associates consumer research reports over one-half of U.S. broadband households have a smartphone and nearly one-third have a tablet. All these extra screens make it more difficult to follow consumers and necessitate detailed tracking solutions.

These types of tracking solutions raise privacy concerns, often cited by advocacy groups, which could lead to customer rejection of the online advertising industry as a whole. However, Parks Associates’ report Advertising Strategies on Connected TVs finds 45 percent of U.S. consumers are comfortable with targeted ads based on their TV-viewing habits. Over one-third are comfortable with targeted ads based on their online browsing habits, according to the report Monetization of Multiscreen Video: Content Owner Strategies.

Agency demand for cross-platform ad synergies will drive the development and adoption of RTB sell-side platforms for emerging media, particularly mobile, online video, and social media, but these markets will remain small, with growth contingent on the maturation of the online display RTB ad market. Even so, Parks Associates asserts this market will grow quickly. RTB is a complicated process, with unfamiliarity and a lack of industry knowledge as potential inhibitors, but even if they have any significant impact, they will serve only to slow growth, not stop it.

From the article, "Real-Time Bidding: Greasing the Wheels of Digital Advertising" by Heather Way.

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