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Real-Time Bidding Boosts Ad Revenue for Publishers

The increased use of real-time bidding (RTB) and private marketplaces for selling online ads has resulted in a noticeable boost in revenue for publishers, including a lift in CPMs, according to the digital media platform PubMatic.

A recent analysis by PubMatic of publisher monetization in 2012 showed that by the fourth quarter of last year, RTB was representing almost 31 percent of its paid impressions (a figure that was nearly double what it was at the same time in 2011), as well as accounting for 48 percent of the company’s entire revenue. This means that RTB revenue is experiencing an annual growth of approximately 57 percent, and it now nearly matches the value of the entire ad inventory that is sold through its ad networks.

“[Publishers] are moving from the fixed prices sales of ad networks to dynamically traded inventory,” said PubMatic President Kirk McDonald. “They’ve found that RTB can consistently generate higher CPMs and allow them to react to in-the-moment market opportunities.”

In addition, PubMatic found that private marketplaces (PMPs) may end up increasing inventory value even more than RTB, as the use of PMPs allow publishers to offer ads to select buyers from a guaranteed inventory in a transparent negotiation environment. PMP usage has more than doubled, while the revenue that they generated grew by 120 percent in the third and fourth quarters of 2012.

“While still an emerging mode of selling, it’s also important to underscore the growth in usage and strong results for implementing Private Marketplace sales,” said McDonald. “We’re moving from an era of blind inventory to one where buyer and seller [sic] use programmatic as a tool to increase efficiencies but also build long-term sales relationship sin a transparent manner.”

PubMatic’s data analysis was based on a quantitative review of premium publishers and demand-side ad networks that had been utilizing its Strategic Selling Platform (SSP) from Q1 2011 through Q4 2012, which includes thousands of buyers and sellers.

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