Monica Almeida/The New York Times
Frank Addante, 36, chief executive of the Rubicon Project, says that 97 percent of American Internet users encounter its electronic ad sales system every month. And most aren’t even aware of it.
YOU can be sold in seconds.
Beverly Orr
“Online consumers are being bought and sold like chattel,” says Jeffrey Chester, executive director of the Center for Digital Democracy.
No, wait: make that milliseconds.
The odds are that access to you — or at least the online you — is being bought and sold in less than the blink of an eye. On the Web, powerful algorithms are sizing you up, based on myriad data points: what you Google, the sites you visit, the ads you click. Then, in real time, the chance to show you an ad is auctioned to the highest bidder.
Not that you’d know it. These days in the hyperkinetic world of digital advertising, all of this happens automatically, and imperceptibly, to most consumers.
Ever wonder why that same ad for a car or a couch keeps popping up on your screen? Nearly always, the answer is real-time bidding, an electronic trading system that sells ad space on the Web pages people visit at the very moment they are visiting them. Think of these systems as a sort of Nasdaq stock market, only trading in audiences for online ads. Millions of bids flood in every second. And those bids — essentially what your eyeballs are worth to advertisers — could determine whether you see an ad for, say, a new Lexus or a used Ford, for sneakers or a popcorn maker.
One big player in this space is the Rubicon Project. Never heard of it? Consider this: Rubicon, based in Los Angeles, has actually eclipsed Google in one crucial area — the percentage of Internet users in the United States reached by display ads sold through its platform, according to comScore, a digital analytics company.
Rubicon is among a handful of technology companies that have quietly developed automated ad sales systems for Web site operators. The bidders are marketers seeking to identify their best prospects and pitch them before they move to the next Web page. It is a form of high-frequency trading — that souped-up business of algorithm-loving Wall Streeters. But in this case, the prize is the attention of ordinary people. And it all depends on data-mining to instantly evaluate the audiences available to see those online display ads, the ones that appear on Web sites next to or around content.
In industry parlance, each digital ad space is an impression. The value of an impression depends on several factors, like the size of the ad, the type of person who is available to see it and that person’s location.
“The first impression seen by a high-value person on the opening page of a major newspaper first thing in the morning has a different value than a user from China who is 12 and has been on the Web all day long playing games,” says Frank Addante, the founder and chief executive of Rubicon.
Yet for most of us, real-time bidding is invisible. About 97 percent of American Internet users interact with Rubicon’s system every month, Mr. Addante says, and most of them aren’t aware of it.
That worries some federal regulators and consumer advocates, who say that such electronic trading systems could unfairly stratify consumers, covertly offering better pricing to certain people while relegating others to inferior treatment. A computer-generated class system is one risk, they say, of an ad-driven Internet powered by surveillance.
“As you profile more and more people, you’ll start to segregate people into ‘the people you can get money out of’ and ‘the people you can’t get money out of,’ ” says Dan Auerbach, a staff technologist at the Electronic Frontier Foundation, a digital civil rights group in San Francisco, who formerly worked in digital ad data-mining. “That is one of the dangers we should be worried about.”
Of course, ad agencies and brands can tailor ads to Web users without real-time bidding. They can also buy ads without aiming them at narrow audience groups. But for marketers, the marriage of ad- and audience-buying is one of the benefits of real-time bidding.
Not so long ago, they simply bought ad spaces based on a site’s general demographics and then showed every visitor the same ad, a practice called “spray and pray.” Now marketers can aim just at their ideal customers — like football fans who earn more than $100,000 a year, or mothers in Denver in the market for an S.U.V. — showing them tailored ads at the exact moment they are available on a specific Web page.
“We are not buying content as a proxy for audience,” says Paul Alfieri, the vice president for marketing at Turn, a data management company and automated buy-side platform for marketers based in Redwood City, Calif. “We are just buying who the audience is.”
Still, for many consumer advocates, real-time bidding resembles nothing so much as a cattle auction.
“Online consumers are being bought and sold like chattel,” says Jeffrey Chester, the executive director of the Center for Digital Democracy, a consumer group in Washington that has filed a complaint about real-time bidding with the Federal Trade Commission. “It’s dehumanizing.”
FRANK ADDANTE is 36 years old and given to wearing black shirts with a white Rubicon logo on the front. Rubicon is the fifth company he has started or helped to found.
In 1996, in his dorm room at the Illinois Institute of Technology, he developed and introduced a search engine. He later helped found L90, a digital ad technology company that went public and was later acquired by DoubleClick. His fourth enterprise, StrongMail Systems, provides e-mail delivery infrastructure to large companies.
