Latest / Retail Media Breakfast Club / Developments in RTB (Real-Time Bidding) for Retail Media
Transcript
- Developments In RTB (Real Time Bidding) For Retail Media === [00:00:00] Kiri: The retail media world loves to throw around technical terms, but few provoke as much debate as realtime Bidding for many realtime bidding carries baggage from its early programmatic display days. Low [00:00:15] quality inventory, brand safety, nightmares, and money disappearing through murky supply chains. But Andreas Refin, CEO, and co-founder of Pen Leap has a different take. [00:00:27] He believes realtime bidding [00:00:30] is the key to unlocking retail media's next phase of growth. And after our recent conversation, which was unfortunately plagued by some technical difficulties, thank goodness for transcripts, I'm starting to see. Why his perspective matters. [00:00:45] So what is realtime bidding in retail media? [00:00:49] At its core, it's a mechanism that lets major ad platforms connect directly to onsite inventory across different media networks. When a shopper visits a [00:01:00] retailer site, an ad request goes out in real time, and platforms like Google, Microsoft, or the Trade Desk respond with the relevant product ads in milliseconds. [00:01:12] The retailer maintains control over what [00:01:15] inventory is available and which brands can participate. Andreas cares so much about this because he sees real time bidding. Solving retail media's biggest structural problem fragmentation. Retailers struggle to access large [00:01:30] media budgets that agencies control and brands struggle to buy retail media at scale without managing relationships with dozens of individual retailers. [00:01:40] No, they do not want that retail.. Real time bidding creates the connective [00:01:45] tissue between those two worlds. In today's episode, I'm gonna cover off three key developments from our conversation last week that show where real time bidding is heading and why it might finally be ready for prime time in retail [00:02:00] media. [00:02:00] Let's go. [00:02:01] [00:02:02] Kiri: First I ask Andreas, what percentage of retail media could be delivered through real-time bidding in the future? And even though I know he's super bullish on real time bidding, his answers still surprised me. [00:02:14] Andreas: [00:02:15] I'm very certain, yes. Um, I'm in all those discussions right now. Um, everyone is struggling to bring, um, the media dollars in and everyone looks for some easy incremental [00:02:30] money and, um, there's a lot of pressure, um, currently, um, I think. We had way too bullish expectations and we are paying for that right now. [00:02:42] And everything that [00:02:45] helps bring more money in is very welcome at this point of time. So I do believe that everyone will open up the world gardens and to some, um, extent bring yeah, [00:03:00] programmatic like demand in. Um, whether they will allow this for the top rent and how exactly it will be managed, time will tell, but there's no reason to exclude that. [00:03:12] Also, keep in mind that many [00:03:15] retailers have a high concentration. They get the vast majority of their revenues from the, let's [00:03:21] Say, top 20 or 50 brands. And they struggle to access the rest. There's no reason why you wouldn't backfill that. Um, [00:03:30] those smaller brands were already spent money elsewhere. So getting a slice of that money makes total sense. [00:03:37] [00:03:38] Andreas: ~Yeah. ~ [00:03:38] Kiri: Next. I wanted to talk about whether there is a future in realtime bidding in offsite ads or display or [00:03:45] video ads, or if we're gonna be limited to realtime bidding being suitable just for onsite sponsored product type advertising. [00:03:54] is there a future for RTB in offsite [00:04:00] ads or. Display or video, is that, is that fee like technically feasible? Do you think that that might be part of the future? [00:04:11] Andreas: I, I assume that this is gonna happen at some point. Like [00:04:15] one, um, application we are currently seeing of RTB is, um, let's call it a retailer led. Network and we are currently, um, starting to build something, um, like this for one of our [00:04:30] clients. So the way this [00:04:33] Kiri: works time in our last live stream about the, you know, retailers [00:04:39] Andreas: Yeah. [00:04:40] We, we know that Best Buy is taking a similar approach now. So the way that [00:04:45] works is that, um, the retailer who runs the network. Is on the pen tech, um, all the others and the smaller players in that segment that don't have the power to stand up media network back [00:05:00] to the, um, yeah, to the company that runs the ad network. [00:05:06] They have demand, um, in their. DSP and respond in real time to those requests. So this is [00:05:15] step one of what they plan to do. The next step is then, um, to use the first party data and, um, and actually target those customers offsite across the whole [00:05:30] network, which is. Germany, a very tricky thing to do, um, because of privacy, [00:05:38] it is, it's really hard to quantify. I think it, um, it depends on the type of [00:05:45] retailer, like size matters, the depth of assortment, um, may, uh, matter to some extent. I think the, for the bigger guys, they will. [00:05:54] Always try to handle the lion's share, direct and backfill [00:06:00] through, um, RTB and a programmatic like approach. The smaller guys, those that would also agree to be part of a retailer led ad network, they may have an almost hundred [00:06:15] percent share that comes outta part of the growth. Probably come from something that is more programmatic like for the same reason I mentioned before. [00:06:27] If you struggle to [00:06:30] access through media budgets, you may get to whatever, one and a half, two point half percent revenue. Cut. Um, there are bullish growth projections [00:06:45] and I think, um, accessing media budgets through a network may be, um, a bit easier. So I think. In the next five years, we might see a split of maybe 50 [00:07:00] 50 across the market. [00:07:01] But hey, time will tell. Um, nobody knows this in, in detail, but that's my guess. Retailers know [00:07:15] that a marketplace model can dramatically boost product assortment, shopper engagement, and total revenue. But to get the most out of your marketplace, you need an ad tech solution that can really engage sellers. [00:07:30] Miracle Ads is powering the future of retail media for leading retailers to activate both three P Sellers and one P brands. [00:07:38] Kiri Masters: Learn more@miracle.com. That's M-I-R-A-K [00:07:45] l.com. [00:07:45] [00:07:46] Kiri: And now here's where things get really interesting because while everyone's focused on consumer retail media, Andrea shared how these same principles are starting to apply in the B2B space. [00:07:59] Andreas: I [00:08:00] think technically it's pretty much the same whether you have a B2B buyer or B2B buyer. It, it makes no difference when it comes to the ad serving. Usually there is a difference on the. Brand side, [00:08:15] however, and that's ~what I, ~what I would say is CLV is just fundamentally different, a business buyer. And we have one case, ~um, ~it's a, ~um, ~it's a business that runs a B2C and a B2B platform. [00:08:28] ~And ~they have on the one side just [00:08:30] yeah, regular consumers buying stuff on the other side, they have. ~Um, ~business, ~um, ~companies ~actually ~buying products. ~It's a, ~it's a similar range of products, but different, ~um, ~rationale. ~So ~if you win one of those companies, they will keep ordering ~again and, and ~again and again. [00:08:43] So, ~um, ~a [00:08:45] single purchase, ~you, ~you shouldn't look at the transaction value. You should look at the overall long-term value, including all those repeat purchases from the company you win. ~So ~you. May wanna show different reports and [00:08:58] Kiri: Yeah. [00:08:58] Andreas: ~Um, ~make them aware [00:09:00] that there's more money than you would see ~in a, ~in a first transaction, right? [00:09:04] Besides that, I think it's ~pretty, um, ~pretty similar. The only thing is ~you, ~you need a broad range of different competing B2B brands ~then ~for this to [00:09:15] make sense. [00:09:15] Kiri: Yes, exactly. If I was a, if I was an AD buyer for ~a B two and, and I wanted to target B2B ~a B2B audience specifically. ~Would that be, uh, ~how would I navigate that through RTB? ~Because let's say if I'm same ~if I'm ~Coke right ~Coca-Cola and ~I want, ~I'm ~actually ~doing their B2B media buys, how would I do that differently? [00:09:29] Andreas: Well, ~let's, ~let's [00:09:30] take Home Depot as an example. ~Okay. ~They have professional, ~um, ~buyers ~and, um, they have then, ~and consumers ~and ~the professionals, ~um, ~of course, it's either companies ~or, ~or handyman. ~They, ~they will, ~um, ~have a totally different rationale. They are much more valuable. ~So ~you can segment the audiences [00:09:45] and ~you, um, can ~allow, ~um, ~whether it's direct sales or RTB, ~um, to, um.~ [00:09:48] Those app platforms ~to ~target different, ~um, ~types of customers. ~So nothing changes here. Um, on, ~for sponsor products, it's usually a bit more context heavy than ~it's ~audience heavy, ~but in such a, if ~there's ~such ~a. Huge [00:10:00] difference between a B2B buyer and a B2C buyer. That segmentation ~really ~makes sense. ~So ~you would allow your brands to target professionals specifically, and the way our platform does that, it's less with audience exclusion, but it's with, ~um, ~[00:10:15] what we call bid modifiers. [00:10:16] So you can, ~um, ~enter whatever you could define, ~um, ~raise the bit by 150%, ~um, ~if the product is shown to a professional. ~Okay.~ [00:10:24] Kiri: Actually, yeah, ~that, ~that's a much better example, ~the ~the Home Depot one, because ~I, ~I believe their [00:10:30] pro audience is like 30%, or ~you, or their sa ~maybe their sales is 30%. ~Um, products, ~ [00:10:35] Andreas: ~Big, um, ~big segment for them. [00:10:36] [00:10:37] Kiri: So RTB, real-time bidding in retail media isn't the wild west of early programmatic [00:10:45] display. It's evolving into a layer of infrastructure that gives retailers flexibility, a mechanism to access new budgets without abandoning direct relationships with advertisers and even a path forward for B2B commerce [00:11:00] platforms. [00:11:00] And Andreas's prediction of a 50 50 split feels bold, but maybe the logic holds. Not every advertiser needs or wants a white glove direct relationship with every retailer. Sometimes efficiency and scale [00:11:15] trump the depth of reporting. Whether you are bullish or skeptical on real time bidding, one thing is clear. [00:11:21] Retail media can't scale to its projected potential if it remains entirely relationship based. Real time bidding offers a complimentary path, one that [00:11:30] is maybe finally maturing enough to deliver on its promise. [00:11:33]