Neal Mohan, Google vice-president for display advertising products, has told the Financial Times that automated ‘real-time bidding’ will boost global online display advertising from its current $24bn to $200bn in a few years’ time.
Key to this will be online trading exchanges like Google’s own DoubleClick which has seen the volume of ads traded triple in the last year.
“I have never seen a technology get adopted in this industry as fast as real-time bidding and I have seen dozens and dozens of technologies,” Mohan says.
Google takes about $2.5bn in online display revenue at the moment although some commentators believe that Facebook will overtake it this year with about $4bn. Google is trying to compete with Facebook by, among other things, adding a ‘+1′ button, its equivalent of Facebook’s ‘like’ button.
In online ad exchanges publishers can offer their unsold advertising space to bidders who can target them at the last minute.
Bidding is done automatically based on algorithms and preset rules based on how much advertisers are prepared to spend and the profile of user they wish to reach.
Handily for Google (and others) humans are not required.
Mohan also says that both publishers and agencies will benefit from the shift. A Google-commissioned study found that publishers saw a 188 per cent lift in revenue as a result of participating in its ad exchange. Such a system, if widely adopted, could reduce the costs of buying an online ad from 28 cents in each dollar spent to just two cents.