International market research firm Parks Associates says advertising revenues from real-time bidding (RTB), which allows companies to target consumer segments in real time, will reach $7 billion in North America by 2017. The independent research firm's report Real-time Bidding: The Online Ad Exchange reports RTB will account for 34% of all online display advertising revenues by 2017. Industry efforts such as Facebook Exchange, along with firms such as SpotXchange, Nexage, and Google that are opening their ad inventories to the RTB market, are significant factors driving growth.

"Facebook's newly launched ad exchange is a driving force for RTB adoption and could help Facebook regain its market value as the social network serves approximately 33% of U.S. display ad impressions," said Heather Way, research analyst, Parks Associates.

RTB refers to the complete process, including the technology infrastructure and management systems, that enables the automated purchase and placement of online display advertising to specific audience segments. This more efficient and targeted advertising method is an important tool for firms such as Facebook, which is struggling to monetize content, because RTB allows them to place more relevant ads in front of their members.

"RTB enablers offer greater transparency, control, and accuracy, so once media buyers realize the benefits and become familiar with the new ad buying and selling process, ad spend from traditional display advertising will quickly transfer to RTB platforms," Way said. "Incumbent display ad sellers, such as ad networks, must integrate RTB capabilities to avoid losing market share."

However, the RTB process is not easily understood by the buyers of online display advertising.

"Ad agencies face multiple obstacles, including new media consumption and multidevice adoption, in an expanding and complex business environment," Way said. "New ad markets are difficult to navigate, and agency executives struggle to understand the inner workings of digital media and their impact on media campaigns."

From the article, "Real-time bidding (RTB) is changing online display advertising market, with revenues reaching $1.6 billion in 2012."

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