Julia Smith, Communications Director at Jemm Group, discusses the emergence of the Real Time Network and how this fits into the evolution of the ad network model.

“Evolve or die”. That is the common statement made by the industry to ad networks over the last 12 months. Harsh? Possibly, but this is the fact facing existing ad networks.

The industry and, more importantly, the buying landscape has changed so radically over the last year that all businesses from agencies to publishers to ad networks have to evolve too.

The single biggest change has been the increased use of real time bidding (RTB). RTB was very much in its infancy at the start of 2010 but with $350 million spent in the US alone last year, it would be fair to say the 2011 is very likely to be the year of RTB.

ExchangeWire backs this statement up with an article entitled ‘What can RTB really do for marketers’ in which Ciaran O’Kane wrote: ‘RTB is the hottest and most talked about acronym in the online display market’.

So if RTB is the most talked about acronym, is RTN the new kid of the block of acronyms?

Yes and I will explain why by defining the new buying landscape and how the current players fit within this.

Currently, a publisher will use a mixture of ad networks and SSPs (Supply Side Platforms) to sell their remnant inventory to, hoping that it will enable them to increase their reach beyond their in-house sales team. Ad networks are well known for having strong, long held relationships with the planners and buyers within the traditional digital ad agencies.

In turn, the SSPs do not sell currently to the ad agencies but are able to sell publishers inventory through the DSPs.

An RTN however, works with all buying platforms and buyers. At Jemm, which is the first IASH accredited RTN in the UK, we work with DSPs, ATDs, SSPs, ad exchanges and traditional ad agencies. Plus, our inventory is real time enabled, ensuring that the buyers and sellers pay the true value of each impression, improved reach and cost efficiency.

Buyers are also asking for greater transparency from the sell side. An RTN works with the RTB enablers such as Appnexus, Turn, Contextweb and Mediamath and will deliver a higher level of transparency on the ad URL and increased segmentation.

Another difference is that traditional ad networks deal in remnant inventory. This has worked well for publishers who are trying to achieve a higher sell through and who have a strong in-house sales team selling their premium inventory. However, premium inventory often remains unsold but is then sold at remnant inventory rates.

By running both premium and remnant through an RTN, publishers can receive a higher CPM, as the bidders increase their price for quality inventory.

So what technology does an RTN employ?

Technology is at the heart of RTB, and yet most off the shelf ad servers cannot enable bidding in real time.

At Jemm, we use two pieces of technology to be real time connected. The first technology is called ‘Optimise’ and is an in-house campaign optimisation product that also provides inventory and revenue optimisation.

The second and most important technology piece is our ad server. We have a custom–built algorithm that allows us to take real time bids and process them.

So how do buyers and sellers benefit from working with an RTN?

Firstly, an RTN will make larger volumes of inventory available at reasonable prices. There are also flexible controls on the sell side around transparency, segmentation and pricing, plus robust brand safety controls. Ultimately, a real time network is built to drive premium results for buyers and a higher revenue streams for sellers.

Finally, let’s not forget that ad networks, agencies, SSPs and all the other businesses are in an all-out battle to find a strong position in the new buying chain. The arrival of real time networks is simply a clear reflection of how critical a link real time bidding has become. Evolving to match what the buyers and sellers need is a crucial step.

Jemm has taken this step. Now let’s see who follows.