Madison Avenue Meets Wall Street: Advertising Index for Publishers Goes Live

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A leading publisher in the advertising trade is on a mission to increase transparency in buying and selling advertising for publishers. MediaPost Communications is set to introduce the RTB 500, a new index that works similarly to the S&P 500 and other stock indexes familiar to the denizens of Wall Street. But rather than stock prices, the RTB 500, which is more at home on Madison Avenue, will track pricing and availability of ad space on the websites of 500 of the leading online publishers, making life easier for those seeking ad space and, hopefully, more profitable for those who are selling it.

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How the Index Works

RTB stands for “Real-Time Buying,” which is just what the RTB 500 will track. To build the index, MediaPost partnered with media technology company OwnerIQ, who will compile real-time pricing data from advertising exchanges. The index will be available on MediaPost.com, as well as in newsletters published by MediaPost such as Real-Time Daily. In addition to the main index, which will have a baseline of 100, online publishers will also be divided categorically into 15 subindexes covering broad topics such as entertainment, games, music and sports.

Why the Index is Needed

Until fairly recently, the buying and selling of ad space was done primarily through direct contact between advertisers and publishers. The rise of programmatic technology, however, which automates real-time bidding on advertising across publishing platforms, is changing the way advertising is bought and sold in the publishing world.

More and more advertisers are jumping on the programmatic bandwagon. According to the New York Times, media agency Magna Global has estimated that 20 percent of the total money spent on digital advertising in 2014 will be done through programmatic technology.

The growing popularity of programmatic buying has created a need for a means of tracking the availability of ad space and pricing in real time. Up until now, such real-time information hasn’t been made available, and programmatic buying has been more or less a shot in the dark, based on information that might already be outdated by the time a bid is placed.

How Pricing Transparency Could Help Ad Sales

The benefits of a real-time ad pricing index to advertisers may seem fairly obvious. Such transparency of data is likely to increase buyer confidence, which may in turn lead to an increase in the practice of programmatic buying among advertisers who up till now have been reluctant to rely on such technology. As the president of the Association of National Advertisers, Robert D. Liodice, told the New York Times, transparency would allow the programmatic buying of digital advertising to be done with the “same confidence as print or television.”

Although the transparency created by the index may have the effect of forcing publishers to be competitive with ad pricing, both the increased confidence among buyers generated by the index and the continued rise in programmatic buying seems likely to result in an increase in overall ad revenues for publishers. For advertisers and publishers alike, it seems that the RTB 500 index is likely to be a win-win.

 

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