Advertising - Instant Ads Set the Pace on the Web: Via NYTimes.com .

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, the 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.

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