Imagine a Competitive Show Having a Digital Marketing Budget 5 – 10x Larger than You Have

If you don’t keep up with Real-Time Bidding (RTB), it sure may seem like that!  RTB, the process of evaluating, bidding on and buying ad inventory on an impression level basis in real-time through online ad exchanges is exploding, and projected to grow 38% year over year, and represent 22% of all digital display ad spending this year, according to eMarketer’s latest forecast.

A key reason is that this auction-based marketplace enables advertisers to more cost-effectively reach their target sets online by buying audiences vs. specific web sites, which can significantly lower CPMs vs. traditional publisher-direct (site-specific) media buys.

So what does this mean to event marketers? Well, let’s look at a hypothetical example comparing a show that does not employ RTB to one that aggressively leverages it.

Let’s say that you and a show which you compete with have both allocated $25,000 of your attendee marketing budget to online display advertising.

For purposes of this example, let’s use an average publisher-direct CPM of $25 and an average RTB CPM of $2.50.  Though publisher-direct CPMs and RTB CPMs vary widely, these are both solid working numbers from actual campaigns we have run for clients’ shows. 

Yes, the RTB CPM is much lower because you are tapping into a much bigger ad inventory pool, potentially 1000s of web sites vs. traditional publisher-direct ad buys which focus on a relatively limited number of sites.  That is the point here.

In this example, your show focuses 100% on publisher-direct ad buys so for $25,000 you can buy 1,000,000 impressions based on an average $25 CPM.

Let’s say your competitor is running a 75% RTB / 25% publisher-direct allocation against the same $25,000 budget, which translates to $18,750 for RTB ad buys and $6,250 for publisher-direct ad buys.

Based on the CPMs above, your competitor will acquire 250,000 site-specific impressions with their $6,250 allocation and 7,500,000 RTB impressions with their $18,750 allocation.

Their total impression buy would thus be 7,750,000 vs. your 1,000,000, so in this example, RTB gives your competitor nearly eight times more digital exposure than you.  Based on the increased exposure, who do you think will have a better chance of getting more attendees from their digital ad spend?

The deltas will of course vary based on the CPM inputs, and RTB allocations, but this example should clearly demonstrate why the impression differentials can be substantial.

Publisher-direct ad buys are still an important part of our ad buying model and the tens of millions of impressions we buy for our clients’ shows.  We buy ad inventory across the price spectrum, and routinely pay double-digit CPMs for publisher-direct ad buys to reach certain audiences, especially ones with high-performing ad units.

However, as we continue to optimize our impression portfolios, we are moving more and more dollars to RTB, and perhaps your competitors are too!

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Posted on January 30, 2014