Real-Time Bidding might be quite difficult to understand for the young advertisers looking to pursue a career in programmatic advertising. Since this “job of the future” requires the use of software to buy ads, there are a lot of “technicalities” to be studied here. Real-time Bidding is one of them.
Real-Time Bidding deals with lots of SPPs and DSPs, ad inventory, auction, buying and selling, ad exchange and we will go through all of these in the paragraphs below.
Real-Time bidding in the big picture context
Real-time bidding’s share of advertising is now three times bigger than it used to be three years ago. This is stated by Statista, concerning countries such as UK, China and the US. Predictions are even wilder than this, with $29 billion anticipated for 2025. So, yes, real-time-bidding is a big deal happening right now in advertising.
Programmatic advertising does not require agencies, media companies, clients or publishers all tangled in tough negotiations over the media buying prices. In programmatic advertising, everything is done by a computer using an algorithm to buy and sell media quickly and efficiently. The algorithm is continually learning and a cloud-software platform records the transactions. This saves agencies and publishers a lot of time, helps eliminate human errors and cuts down on the tons of paperwork previously required. So, where does real-time bidding come in this whole picture? Wait ‘till we get there
Real-time bidding is one part of this whole programmatic process and we’re going to get more in depth with that.
Trying a Real-Time Bidding definition
Is there an “official” definition of real-time bidding? Not quite, but we’ll try to put it as simple as possible. Real-time bidding means online purchasing of ads aided by a real-time bidding auction. Did it get even more clouded? Let’s imagine this:
- The end user opens a browser.
- He gets on a targeted website.
- Let’s say an ad banner is about to take center stage on the web page the user clicked to open.
- In the approximately 100 milliseconds it takes for the page to load, a live online auction happens between different advertisers wishing to serve their own ad banner to the client.
- The one advertiser who offers the highest bid wins
Real-Time Bidding is an interconnected ecosystem bringing together all the parts involved in the buying and distribution of ads. Now, let’s break real-time bidding into parts and see how these parts get “the machine” to work.
DSP is how advertisers and marketers “get in the game”
If you are an advertiser or marketer who wants to start with real-time bidding, you’ll have to join a Demand-Side Platform (DSP). A DSP is a platform that makes the whole process of ad inventory buying and managing a larger advertising exchange platform more simple and easier. Through a DSP you can set up a real-time bidding ad campaigns and change the prices of impressions. All of these come in exchange for a small fee you’ll have to pay to the DSP software provider.
How does an advertiser manage real-time bidding using a DSP?
So, you’re an advertiser who makes the wise decision of using a DSP for better optimizing the ad campaigns. Here’s what a DSP enables you to do, on a more specific level:
- Create targeting profiles.
- Choose the targeted audience you want to reach.
- Set a budget framework.
- Connect to other major DSPs.
- Prioritize the publisher websites best fit for your specific campaign.
- Blacklist specific ad inventories.
- Set a budget limit to be spend in a day.
- Set up KPIs.
- Create custom parameters.
On the publishers’ side, there’s the SSP
Now let’s pass on the publishers’ side of the programmatic advertising world. The correspondent of the DSP here is the supply-side platform (SSP), which manages the digital advertising inventory and connects it to the whole real-time bidding process.
Basically, whenever a user enters a publisher’s page, the SSP is sending a message to the ad exchange. We could imagine the message reads: “Hello there! A person’s about to enter my page. Are you interested in displaying an ad here? How much are you paying for it?”
More technically, the SSP sends a bid request written in code. Embedded in this code is information on the user about to enter the page and the minimum price the publisher would receive for the advertisement.
Now, the bid travels to the ad exchange where all the DSPs we were talking about above start to process it. If the bid matches all the target, budget and other KPIs set by the advertiser in the DSP, then the DSP would bid on that specific ad, by sending a message through an RTB protocol. The message would read: “Hello there! It looks like your target and budget matches mine, so I’d like to offer you this price for displaying this ad banner on your page. What do you say?”. Together with the bid sent by the DSP, there’s also the creative specifics of the ad and the correspondent parameters. All embedded in the code.
The SSP collects all the DSP bids, analyzes them and chooses the highest bid. So, the whole process seems quite simple and efficient if you think about it. All of what we were telling you above happens in milliseconds, and with the precision of a Swedish watch. If all of this sounds nice, but a little far-fetched for you, let’s now discuss the specific benefits you get from RTB in marketing.
10 Benefits RTB could bring to your marketing strategy
1. It works with any ad campaigns, no matter the size or budget.
Not all the biggest media buyers use RTB. Statistics show that there are a lot of local business owners using RTB with only $100 ad budget.
2. Great exposure to a broad range of publishers; cutting down on the research time
Getting access to a large variety of digital publishers, apps, blogs, websites and their target audiences will cut down on the research time and enable advertisers to have a wider overview of the local and worldwide platforms available, their audiences and ad prices.
3. Impressions for better prices
RTB allows for a greater optimization of advertising budgets and campaign objectives. As an advertiser, you can set the ad impression objective, as well as the budget available for it and be sure that you’ll find the right platforms to spend it on to meet your desired result.
4. Buying the right niche audience
The RTB system actually analyzes the first and third-party data from the publishers’ platforms and matches advertisers’ desired audience with the right niche audience from the publishers
5. Reaching the desired relevant public
Marketers find it easier to deliver their messages to the relevant public. Data like age, studies, marital status, gender, interests, locations, finance are all delivered through the RTB system to the marketers.
6. Every ad impression is for real
RTB makes advertising a lot more precise, delivering messages to the people who are really interested in them and most likely to click, subscribe or purchase the specific products or services. There’s no place for wasted ad impressions.
7. One impression at a time
This might be the key feature of RTB. Marketers actually buy one impression at a time, a closely-analyzed impression according to the parameters set by the advertiser. If advertising used to be a lottery in the past, now it’s precise math.
8. Constant optimization
As an advertiser, you can constantly optimize your keywords to find the perfect for your campaign goals and thus minimize any expenditures.
9. Real-time data during running campaigns
Marketers can analyze different parameters to ascertain which creative approaches work best, which websites deliver the most engagement and so on. This enables you, if you’re a marketer, to tinker with your campaign until you reach the optimal setting.
10. Real-time bidding can be done on multiple campaigns, at the same time
There’s no interference in running two or more campaigns simultaneously and bidding on them in real time.
Real-time bidding is part of the future of online advertising
Real-time bidding is part of the future of advertising, where all the parts involved, from media buyers, brands and agencies can find their perfect optimizations to work. Apart from cutting down on a lot of paperwork, time and negotiation energy, RTB has revolutionized the world of online advertising by providing marketers with the one and only possibility to purchase ad impressions one by one. This offers you if you’re an advertiser, better control over your budgets and marketing campaigns and more concise campaign reports that show precisely what works and what doesn’t.
For more information about securing your real-time bidding campaigns, contact Fraudlogix.