Revolution's Battle of the Brands: Microsoft vs. Google in real-time bidding

With real-time bidding promising to take hold in the UK, Kim Benjamin compares the RTB platforms used by Microsoft and Google - AppNexus and AdEx - and assesses their potential for advertisers.

Revolution's Battle of the Brands: Microsoft vs. Google in real-time bidding

There was a time, pre-digital and the modern web, when media planning and buying was, in simplistic terms, a relatively straightforward reach-and-frequency exercise. Google changed all that. In came pay-per-click and a whole new world of auction-based needs in terms of tools and talent - brand and agency side. It seemed only a matter of time before this same bid model pervaded the online display space.

With far too much inventory that lacks the supply-and-demand control of offline media such as television and press, ad networks initially thrived collecting remnant inventory, aggregating and profiling it via various behavioural algorithms before packaging it and pushing it out to buyers. But with so much inventory, both premium and 'long tail', cost per thousand impressions was driven down overall.

Enter real-time bidding (RTB) and the role of exchanges and demand-side platforms (DSPs) - a system that allows digital advertisers to manage multiple ad and data exchange accounts through one interface. Publishers and media owners now have the ability to attract better prices for their premium impressions by creating auction rules around their inventory. At the same time, agencies can minimise wastage inherent in mass blind network buys despite all of the apparent targeting abilities. RTB user segmentation is almost infinitely granular as it works on a by-user basis whereby each impression can be bid for.

'There has been major growth in the past six months with RTB, and the UK is catching up rapidly - the influx of US platforms into the UK has catalysed this and made it much easier to run all activity on an RTB basis,' says Tim Cross, display director at performance marketing agency Netbooster, which uses Google's Invite Media platform to display ads.

Leading the way

Pierre Naggar, managing director EU at DSP Turn, says the UK and the Netherlands are the most advanced, with a number of players in the RTB sector. 'Both these markets had a significant increase in volumes last year and we expect that 2012 will be the year of consolidation,' he says.

He adds: 'France and Germany are probably 12 months behind the UK and the Netherlands because local publishers are still a bit reluctant to make traffic available through exchanges.'

It is easy to see why RTB has gained ground so rapidly. In a nutshell, brands can get more for their money because with RTB, instead of assigning an arbitrary value to a bunch of impressions, the market will decide what each impression is worth, based on demand. 'This can be based on many different variables, the key being that brands can pay based on the value to them of each impression,' adds Cross.

Take-up is growing in sectors such as retail, particularly for those brands with a varied product base where one size does not necessarily fit all as far as the value of ad impressions is concerned. Travel and finance brands are exploring RTB's potential too, primarily due to the intensely competitive nature of these markets. Finance brands have also been quicker to leverage their customer data when it comes to compliance, allowing them to bid more intelligently and deliver further efficiencies.

AppNexus vs AdEx

So who is in the RTB market in terms of exchanges, and how are they developing their products? We asked Julian Ireland, head of strategy and digital planning at media agency the7stars, to assess how two key players stack up against each other. Ireland looked at Microsoft's AppNexus (previously AdECN) and Google's Invite Media (also known as Ad Exchange). Both platforms were reviewed using 10 criteria: current scale, business strategy, inventory, impression volume, category restrictions, agency support, user friendliness, DSP support, the uniqueness of features and future development opportunities.

Google uses its own technology, built on DoubleClick Ad Exchange (AdEx), while Microsoft uses AppNexus technology, effectively outsourcing its RTB capability. Microsoft narrowly emerged as the winner, scoring higher than Google when it came to agency support and current scale. The search engine, meanwhile, impressed with its level of user-friendliness and its business strategy - namely the available extent of integration with the rest of its technology and products, such as AdWords and DoubleClick for Advertisers.

Google's AdEx primarily acts as an exchange for a large number of publishers and long-tail sites, while Microsoft is focused on commercialising its own properties and portals by increasing demand, but the similarities between the two are telling. 'Both Microsoft and Google exercise tight control over the creative that can run on their exchanges, as well as hiding some domains, effectively rendering properties blind to buyers,' says Ben Downing, head of biddable media at Arena Media.

In Google's case, this is requested by publishers wishing to hide their availability on the exchange. Microsoft is obscuring the availability and pricing of specific domains and properties, but in both cases this is due to a fear of cannibalising direct sales prices.

Creative challenge

Downing adds that while the predictions for RTB's growth in the UK look impressive, delivering more premium ads beyond vanilla banners is a challenge. 'We're working hard to make expandable ads, video and even takeovers available to our advertisers via RTB,' he says. 'Our agency relationships have also helped us to use private exchanges to unlock premium publishers and ad placements, which are more attractive to advertisers looking to deliver campaigns beyond direct-response mechanics and metrics.'

The pace of change in the industry will also be crucial to Microsoft and Google's offering and is testing brands and agencies alike. Geoff Smith, head of activation at AOD UK, part of the Vivaki Nerve Center, says that with new inventory, data and technology providers rapidly coming to the market, and with traditional companies altering their products and services to take advantage of the migration to RTB, the ad exchange world has never been more complicated.

'Working with a good trade desk filters out a lot of the initial pain, but advertisers still need to invest time in understanding where the potential for growth and innovation lies in order to get the jump on the competition,' Smith says.

The RTB offerings from Microsoft and Google are at an early stage, in the UK at least, but it is clear that the more savvy publishers are starting to understand their true value - not just to commercialise their remnant inventory, but also to leverage data and technology to sell access to key audiences at a premium.

With RTB, never before has an agency or advertiser had so much control over such a large volume of inventory, while being able to optimise this in a granular way. The ability to find an audience is nothing new, but it is the ability to do so at scale, combined with highly accurate targeting, transparency and buying at a fair market value, that ultimately is driving the step-change in performance for many brands.

RTB platforms





Current scale

Microsoft recently transitioned from AdECN (used in the US) to the biggest volume player in the RTB market, AppNexus.

Only US-operational currently, but European territories are coming online soon.

6 OUT OF 10


Available across several territories outside the US, but the Invite Media team is still being built and activation abilities in the UK remain unclear.

4 OUT OF 10

Business strategy

To avoid cannibalising other Microsoft products, it will only make available premium inventory not sold on a guaranteed audience basis. Unsold impressions pass back down to the network.

5 OUT OF 10


Slick integration with Google's tech/product stack (such as AdWords, DoubleClick for Advertisers) might make AdEx the one to watch.

Challenging multiple DSP/exchange bidding with a one-stop solution.

8 OUT OF 10


A recent Forrester survey suggests AppNexus is the biggest of all RTB platforms, but could Microsoft be hamstrung by the premium-only model?

7 OUT OF 10


Wouldn't comply fully with Forrester's survey requests, but it will be broad.

8 OUT OF 10

Impression volume

AppNexus has 26bn impressions per month, but Microsoft's premium inventory will be a small proportion of this.

6 OUT OF 10


Estimated at 10bn impressions per month currently, and likely to grow quickly as territories activate.

6 OUT OF 10

Category restrictions

No gambling clients - an interesting decision as this sector is a key RTB (cost per acquisition) player.

7 OUT OF 10




Agency support

Experienced, accessible staff with clear understanding of the market and intentions for their RTB product.

8 OUT OF 10


Very limited access to knowledge owners in the UK, referred to Invite Media backend.

4 OUT OF 10


AppNexus' DSP backend is not best in class, according to Forrester. DSP user experience will be critical and it is the independents that have been developed with this in mind. This could be a turn-off for agencies.

6 OUT OF 10


Although the promise of integration into Google's backend is alluring, it lacks some of the algorithmic punch of its rivals (again, the independents). User experience in a DSP sense is well-regarded though.

8 OUT OF 10

DSP support

All major DSPs supported according to source.

10 OUT OF 10


All major DSPs supported according to source.

10 OUT OF 10

What's unique

Premium-only inventory that will attract some.

8 OUT OF 10


Unique integration with other products, attribution abilities.

9 OUT OF 10

Development opportunities

Integration with other Microsoft properties including Passport and Experian data mashups for laser-targeted RTB activity.

9 OUT OF 10


YouTube videos available in AdEx RTB market.

9 OUT OF 10

OVERALL TOTAL (analysis provided by Julian Ireland, the7stars)

72 OUT OF 100


66 OUT OF 100

Summary Microsoft's AppNexus

Despite RTB making big strides in volume and revenue terms, both in traditional display real estate and, more recently, in video, it is a relatively nascent practice that is experiencing growing pains. Microsoft recently switched from AdECN (used in the US) to the biggest volume player in the RTB market, AppNexus, which will soon be rolled out globally, starting with European territories. To ensure it is not cannibalising other Microsoft products, AppNexus will make available only its exchange inventory that is not sold on a guaranteed audience basis. If impressions are not secured above a threshold price, they will pass back down to the network. This might have limited appeal as pricing is likely to be higher than others if premium-only, but if results follow then AppNexus should gain some traction.


Summary Google's AdEx

As ever, cards are being played close to Google's chest currently. Recently it declined to participate fully in a Forrester Wave survey, and while a big player in the US market, Google's AdEx has not really dialled up the team and support, especially in the UK. Indeed, it is understood that a minimum six-figure spend is being imposed to even access the Invite Media team at the backend. The promise is of a one-stop solution that challenges a current issue around duplication and frequency control, which is a strong sell. Of course, once up and running, a slick integration with other products such as Adwords, Google Display Network and DoubleClick for Advertisers (which effectively already uses the AdEx exchange) is expected to deliver very efficient, fully attributable online marketing campaigns.