Real-Time Bidding: Connecting The Dots

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  • April 16, 2015
Real-Time Bidding

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

-Steve Jobs

Rising above initial skepticism among various marketers, the notion of Real-Time Bidding has been gradually gaining importance in the display landscape for some time now. Real-Time Bidding has become the prime focus of advertisers in the past few years, steadily earning their trust, as they have embraced its concept into their performance strategies.

It was the year of 2009 that welcomed the rise of Real-Time Bidding in the scope of programmatic advertising, as it introduced tools and mechanisms completely shifting the concept of buying and selling ad inventory. Ever since then, it has reached the point when its technology can be applied and used at a single buying point on any device.

Real-Time Bidding seems to be that missing piece in the bigger picture of display advertising; one that offers solution for the challenges of traditional display operations, and it does not end there – it solves core issues, such as efficiency and effectiveness, while helping advertisers reach new scale of precision in acquiring advertising space.

In a nutshell, Real-Time Bidding stands for the means by which impressions are bought and sold using a bidding system in real time, quite similar to auctions on the stock market.

Beyond ambiguities

One major misconception surrounding RTB since its introduction is the proposition of being equivalent to programmatic advertising. Real-Time Bidding is a type of programmatic advertising, more precisely, its subset.

On the other hand, ad sale and purchase don’t always happen in real time and at auctions. Advertisers can choose to reserve inventory and buy it at fixed or negotiated price. This is referred to as programmatic direct, reserved, or guaranteed.

Changing the ad landscape for good

RTB’s shift of the ad landscape is a direct result of the efforts of advertisers and publishers to make the process of buying and selling more efficient.

The past few years have witnessed the eagerness of marketers to grasp the core idea behind RTB, as well as their dedication to its further development ever since. The points below offer some insight into few of its more obvious assets.

Real-Time Bidding in practice: the step forward

1. Impression by impression

Real-Time Bidding moves past the concept of buying a vast amount of impressions in bulk. Having access to a huge range of inventory through ad exchange platforms, advertisers can now choose only those impressions relevant for their business scope and bid on them in real time. This brings wasted impressions to a minimum.

With Real-Time Bidding, advertisers now have virtually all necessary information on each impression before they buy it, which means they have more insight into its value. From this point, they can contemplate its advertising relevance for their business. This knowledge stretches further – advertisers can now use this information to estimate their intended audience.

2. Targeting

Real-Time Bidding promises to solve difficulties in reaching the right audiences, a persistent problem of the traditional display advertising. It focuses on targeting particular viewers and forming criteria for types of consumers.

Real-Time Bidding employs the following targeting subsets:

  • Geo Targeting. This refers to targeting visitors based on their geographical location – such as country, city, postal code, or other similar information.
  • Fold Position. Some advertisers may want their campaigns placed on a certain position on a web page, such as above or below the fold. This preference is feasible in the campaign creation, and it is usually desired for an even better audience reach.
  • Frequency capping. Frequency refers to the number of times a single user sees an ad for a certain time. Frequency capping controls the maximum number of times an advertiser wishes a single viewer to see their ad.
  • Browser. This type of targeting proposes the opportunity to run a campaign only to particular web browsers or specific web browser versions.
  • Operation system. Some advertisers might want to target consumers who use specific operating system. In this way, they might want to optimize their budget set for a certain campaign.
  • Device. Consumers might use various devices – desktops, laptops, mobile phones or tablets, leaving advertisers with the option to choose this targeting subset as their preference for narrowing down their audience.

Besides the above-mentioned subsets, reaching audiences can be even more specific by employing Audience targeting and Retargeting.

Audience Targeting involves the use of third party data to segment consumers based on their interests and/or intent while retargeting focuses on marketer’s own data (this is first party data). Retargeting results in better performance because it’s focused on consumers who are already interested in some products or services of a certain marketer.

3. Efficiency

With narrowing the target audience and in that way increasing the chances for success of the advertiser’s goals, the efficiency scope of RTB is multi-fold. Providing ad buyers with access to huge number of inventory and optimizing their choices, direct negotiation between publishers and ad networks is minimized, along with the need for human ad buyers.
By purchasing impressions in bulk, advertisers pay the same CPM across the board despite the fact that some users in some specific segment will be more valuable than others. Real-Time Bidding allows buying and selling on a per-impression basis, so advertisers only pay for the most relevant users and by doing this, they achieve the maximum ROI.
With Real-Time Bidding, publishers can work with hundreds of advertisers at one time, ensuring that they in turn can make the most of their inventory by always selling to the highest bidder.

4. Transparency

It’s not just about knowing exactly what you buy and how much you pay for it. It is a good starting point, undoubtedly, but it’s only a start. The bigger issue is the context in which advertisers want to gain full insight on where their ads are ending up.
The degree of transparency is largely dependant on Demand-Side Platforms and inventory sources. Processes in traditional advertising lacked transparency and this affected reports on the ad placement on a site. RTB platforms are making efforts to provide advertisers with greater visibility of their ad placement and who they are seen by.
Making transparency the industry standard, Real-Time Bidding provides greater control for advertisers in tracking the exact websites on which their ads are displayed, in this way also ensuring brand safety.

5. Safety

Brand safety is legitimately a major concern for both advertisers and publishers. Publishers need to control the advertisements and the advertisers featured on their websites so as not to reduce the brand value with low-quality ads or ads featuring inappropriate content.

Advertisers in turn need to have assurance that their advertisements will not end up in a segment of a website unnoticeable for the user, or get lost among bunch of other ads, thus lowering the possibility that the end user would click on them.

This issue can be at least partly resolved with the help of platforms used by the parties involved in RTB, i.e. by creating block lists for certain types of content and ads. In near future, marketers are expected to adopt even more proactive approach to addressing the issue of safety.

Summary

With a promise to change the ad landscape for good, Real-Time Bidding has indeed come a long way from its rocky beginnings to delivering more than expected. It surely took some reshaping and adjustments, but ultimately, it converted the challenges of traditional display advertising into opportunities to reshape the new ad landscape. Being labeled by experts as “the future of marketing in its infancy”, it seems legitimate to expect that the best of Real-Time Bidding is yet to come.

Mimoza Naumovska

Mimoza Naumovska

Social media manager and content creator at Bonadza. I run the social profiles of the company and craft content for Bonadza's blog. I'm exploring the programmatic landscape and I'm eager to expand my blogging horizons. I love books, beer and gigs.

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