What You Need to Know
In the world of programmatic advertising, knowledge of Real-Time Bidding (RTB) is a must. RTB is an integral component of programmatic and represents a means through which advertising inventory is bought and sold on a per-impression basis via instantaneous auction.
The process is very similar to how financial markets work in that RTB is fast, efficient, and market-driven through supply and demand. In less than 120 milliseconds, RTB enables an auction system driven by an ad placement through an SSP (Supply Side Platform) and demand through a DSP (Demand-Side Platform).
Opportunity: This is best illustrated with an example. While browsing on the internet, a user – we’ll call him Mark lands on a website. Mark loves football and he’s checking sports media to see the latest results and commentaries from the weekend’s games. By doing so he triggers an ad space or impression subsequently auctioned. If Mark’s profile matches the target of several buyers (brands such as Nike, Heineken or maybe Wilson), the one with the highest bid will win the auction and get the chance to broadcast its message to Mark while he’s reading news.
1 – Spend Optimization
RTB allows maximum return on investment for targeted campaigns. Ads are displayed to qualified profiles which can most likely lead to an action. An advertiser can set up the maximum bid they are willing to pay for an impression before entering an auction. It’s also possible to gather meaningful insights in order to optimize bids and to evaluate an ad placement’s performance in real time.
2 – Targeting
RTB makes it possible for media buyers to identify relevant ad placements or websites which they may not have considered as part of their media plan. It allows them to whitelist those spotted placements within a specific campaign in order to generate the best performances. Moreover, they can effectively address their audience with specific strategies or messages.
3 – Competitive Advantages
RTB offers the opportunity to gain a competitive advantage because advertiser’s can leverage the power of their own audience data, alongside custom targeting, to make buying decisions that get closer to the absolute value of each impression. You only pay for what you want at the price you know it to be worth.
The opportunity around Programmatic advertising is massive. It is simply an integral part of any advertiser’s marketing plan. Knowledge about how RTB works is crucial to maximizing your ROAS via Programmatic. Get more familiar with the technology, have a partner that can explain it, and watch your results skyrocket! Call or email us today!