How Effective Will Mobile RTB Be For Ad Buyers?

I’ve been reading quite a bit about RTB in mobile recently. Some ad tech vendors have been talking it up in the usual trade press outlets. It’s the next channel to succumb to the RTB revolution apparently. Really? Is it even possible? The problem I have with RTB in mobile is that nobody is actually explaining how it works. RTB in online display is fairly well documented now. Mike On Ads has done a great job breaking it down to the technically challenged among us. Mobile on the other hand is getting the usual vapour-ware treatment that is so prevalent in ad tech. All talk – no substance.

The one big problem I have with this whole RTB mobile aspect is that there's no universal cookie on mobile devices. This surely makes it virtually impossible to derive any real performance from mobile campaigns – and ascertain the true value of a mobile impression. What are we targeting against then? As far as I know you can target mobile users on the following variables: operator, day parting, context, demographic and information passed by publisher. You can drop cookies on some android phones – but it’s still leaving out a whole swathe of the market. The one variable I didn’t mention – and it could crucial to this whole piece – is location.

I’m figuring that location will be the real draw for RTB-enabled mobile inventory. Imagine if a user is in an area where there are multiple coffee shops, such as Nero and Starbucks. Let’s say that Nero and Starbucks know from the information passed from the pub that this user fits the demographic of a typical coffee-swilling yuppie. Both advertisers know from the location-passed on that ad call that he’s 300 yards from their store, and want to target him with an offer in real-time. Cue the frenzied bidding. This then would become a powerful incentive for advertisers to buy through RTB.

The problem here is scale. I have an Android HTC desire and I rarely see any ads. I regularly visit sites like BusinessInsider.com and Guardian.co.uk through my mobile browser, and I never see any mobile display advertising. I’m particularly surprised at the BusinessInsider as its online site is populated with a ridiculous number of ads. Being a heavy consumer of online content on my phone, I would expect to see some volume. And what about all the “normobs” who don’t have smartphones? That’s a pretty chunky audience to exclude. How do you achieve the scale necessary to do make RTB cost-effective on mobile?

I could be wrong in all my assumptions, and I am happy for any mobile-focused RTB expert out there to call me out on this. I won’t be embarrassed, as I’m not the only one who is confused by the crazy mixed marketing messages eminating from mobile RTB innovators. Educate me - and the masses obviously!