•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   

New York. Advertisers have been able to direct online messages based on demographics, income and even location, but one element has been largely missing until recently: immediacy. Advertisers booked slots in advance and could not make on-the-fly decisions about what ads to show based on what people were doing on the Web.

Now, companies like Google, Yahoo and Microsoft let advertisers buy ads in the milliseconds between the time someone enters a site’s Web address and the moment the page appears. The technology, called real-time bidding, allows advertisers to examine site visitors one by one and bid to serve them ads almost instantly.

For example, say a man just searched for golf clubs on eBay (which has been testing a system from a company called AppNexus for more than a year). EBay can essentially follow that person’s activities in real time, deciding when and where to show him near-personalized ads for golf clubs throughout the Web.

If eBay finds out that he bought a driver at another site, it can update the ad immediately to start showing him tees, golf balls or a package vacation to St. Andrew’s, Scotland, often called the home of golf. If a woman was shopping, eBay could change the ad’s color or presentation.

“The biggest problem with advertising was that decisions about what ads to show were made way in advance of when they actually appear,” said Brian O’Kelley, chief executive of AppNexus. “There are a lot of reasons you want to make those decisions as close to when the ads run as possible.”

Compare real-time bidding to, say, billboard advertising. In the real-time process, billboard space would be auctioned off second by second and tailored to each viewer. Here comes a red Camry, driven by a 40-year-old woman who is on her way from the grocery store: which advertiser will pay the highest price to show her an ad?

“Even throughout the course of a day, information can change pretty dramatically,” said Neal Mohan, vice president for product management at Google. “The more precise you can get in terms of being able to act on it as soon as you get that information, the better it will be.”

While companies have been plugging real-time bidding for a couple of years, industry heavyweights are now behind it. Google introduced its revised DoubleClick Ad Exchange, offering real-time bidding, in September. Yahoo is testing the process on its Right Media Exchange, and Microsoft on its AdECN exchange.

A consumer would barely notice the shift, except that ads might seem more relevant to exactly what they are shopping for. It is another way in which marketers are massaging information — and something that has raised ire in Washington, where the Federal Trade Commission has been holding discussions on tailored advertising.

“The fact that you can be auctioned off in 12 milliseconds or less just illustrates how privacy in this country has rapidly eroded,” said Jeffrey Chester, executive director of the consumer group Center for Digital Democracy.

The bidding is good news for publishers because advertisers are willing to pay more for targeted ads. In a Google study, publishers received prices on average that were 130 percent higher on ads sold through the DoubleClick exchange, compared with ads sold through networks. United Online, which owns sites like Classmates.com, has been working with the company PubMatic to sell its unfilled ad space in real time and has gotten 50 percent higher prices on those spaces, said Jeremy E. Helfand, the chief sales officer.

Advertisers say real-time bidding cuts down on wasted money. “You can use less media because you’re using more selected, or more efficient, media,” said Edward Montes, managing director for Havas Digital North America.

AppNexus is one of the companies helping marketers automate their analysis and bidding. Matt Ackley, vice president for Internet marketing and advertising at eBay, said he had seen triple-digit increases in return on investment — the ratio of overall sales to overall ad spending — since he began working with AppNexus.



The New York Times