RTB.com has officially launched with all eyes on mobile real-time bidding aimed at smartphones and tablets in the premium ad space.
Fred Hsu, RTB.com founder, said the focus now turns toward building out hyper-targeting capabilities by pulling in billions of transactions daily. The world of mobile RTB remains static, mostly revolving around simple rules-based systems, and that’s an opportunity to improve on machine learning techniques through data, he said.
About 25% of digital revenue now flows through programmatic channels, where buyers evaluate audiences and publishers, per impression based on predictive modeling, said Qasim Saifee, GM at OpenX. Data gives buyers information to make immediate decisions, but it’s a little trickier to make it work in mobile because of the issues around cookies, he said.
U.S. advertisers will spend more than $3.36 billion on real-time bidding this year — including mobile, up from just under $2 billion in 2012 and less than $1 billion in 2011, eMarketer estimates.
Demonstrating the uptick in mobile RTB, Hsu said today the company’s hit a monthly run rate of more than $1 million, up from tens of thousands in September last year. In fact, it generated more revenue in April than it did for the entire year in 2012. The company’s pushing an “eight-figure run rate” and expects to triple that during the next six months.
“We buy on CPM and sell through CPI, but we’re trying to automate it more than Turn and Rocketfuel,” he said. “The platform monitors the RTB stream, billions daily, and when we see a user on a specific device, knowing their location, we’ll determine the user’s worth, maybe a fraction of a penny, before making a bid.”
He said the company doesn’t pull in personally identifiable information, but rather generic identifiers that build a profile over time from data, based on site visits and behavior, rather than Facebook IDs or email addresses. There’s also an opt-out process.
Mobile RTB continues to rise in Europe. European advertisers spent 275% more on RTB mobile ads in Q1 2013 sequentially, according to the Adform Q1 RTB Trend report. The report also found advertisers and agencies are still willing to pay a premium for above-the-fold impressions, although the gap has continued to narrow since Q4 2012. In Q1 2013, above-the-fold prices were 22.5% higher, compared with 26% higher at the end of 2012.
Hsu founded performance marketing network Oversee in 2000, selling a minority stake to Oak Hill Capital Partners in 2008 for $150 million. He grew the company to more than 225 employees generating $200 million in revenue, without funding, as well as investing in HomeAway, Rubicon Project and Space Monkey.