This month marks the annual 7 day bender (oops…”Festival”) known as the Cannes Lions International Advertising Festival ( http://www.canneslions.com). An army of Don Draper wannabes, and their corporate sugar-daddies, will frolic at exclusive yacht and villa parties with celebrities like Bill Clinton, Ben Stiller and Selena Gomez.

Except for a few data geeks, no one will discuss the most significant disruption to hit the advertising industry since the Internet - the transition to programmatic, real time bidding (RTB). Carl Fremont, Chief Digital Officer at MEC (http://www.mecglobal.com) (WPP Group’s media buying subsidiary) is one of those geeks, and shared his perspective about RTB, which he calls, “easily, the most important trend in the digital advertising sector for the next five years.”

Automated trading is not new. Industries such as online trading, air travel and e-commerce have been transformed (and expanded) by the introduction of real-time trading exchanges. That disruption is now impacting the $17 billion US online display ad market, projected to grow 18% this year (eMarketer). In Israel this week to present at the Transitioned Media (http://transmedia-conf.com) conference, Carl Fremont shares his views about this transformation and the advent of real-time marketing.

Levi Shapiro“Programmatic buying is the intersection of media, technology and data. It impacts the way we leverage data to understand and get closer to the consumer. Everybody wins if you play smartly.” Buyers of advertising like the operational efficiency, improved targeting and flexible pricing. Publishers appreciate the bump in monetization, sales predictability and operational efficiency. These benefits are driving rapid adoption by brands, publishers and agencies. eMarketer estimates RTB in the US will grow 73% this year to over $3.36 billion, up from less than $1 billion in 2011, reaching $8.5 billion by 2017. “This levels the playing field. Clout used to be determined by how much money you bring. Just like search, RTB lets small advertisers be equal competitors.”

Carl acknowledges there is a downside. “Some in the industry have made their living from face to face meetings. Going forward, the face to face meeting will have to focus on brand strategy and data.” Ironically, brands using RTB are generally spending MORE on media for 3 reasons:

1) Smaller brands can enter the marketplace and trade on data

2) Brands can make marketing decisions in real time, when there is a defined NEED

3) The process is accelerated. In the past, buying display advertising was inefficient

Programmatic and RTB platforms like Pubmatic (www.pubmatic.com), AdMeld (www.admeld.com) and Rubicon ( http://www.rubiconproject.com) serve as a conduit between buyers and sellers, similar to a trading desk. In the television advertising sector, RTB platform Adap.tv (www.adap.tv) has filed to IPO later this year.

Along with biddable media, marketers will need to learn to communicate in real time. Oreo, the cookie brand from Mondelez International ( http://www.mondelezinternational.com/home/index.aspx), famously tweeted during the unanticipated blackout at the SuperBowl, “You can still dunk in the dark.” This was retweeted almost 15,000 times, garnering 20,000 likes on Facebook and increasing the number of both Twitter followers (+ 8,000) and Instragram (+2,000).

Starbucks (www.starbucks.com) also uses extensive social monitoring, both regionally and in local cities, to make real-time marketing decisions. Purchasing display advertising in real-time, in February Starbucks was able to introduce real-time, special promotions in New York City and other areas affected by the Nemo storm.

Finally, MEC (http://www.mecglobal.com/) client AT&T created real-time ads with actual Olympics footage and the tagline “Rethink Possible” ( https://www.youtube.com/watch?feature=player_embedded&v=u9QcZ8QhPpM ).

Even if the conversation at Cannes is about parties, RTB represents a new era in marketing.

Levi Shapiro is a Partner at TMT Strategic Advisors, a research and strategy firm focusing on the technology, media and telecom sectors. He can be reached at levi@tmtstrat.com or via twitter: @levshapiro

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