Real-time bidding is the automated way in which advertising inventory like mobile or desktop is bought and sold via technology platforms such as ad exchanges or SSP (supply side platforms). One way of thinking about it is to look at how the financial markets operate. Ad exchanges or SSPs can be compared to the likes of the NIFTY or SENSEX. Stocks are akin to ad impressions, sellers of the stocks are publishers and the DSPs (demand side platforms) are most closely related to the buyers.
Why does RTB matter?
The introduction of RTB technique in the mobile ecosystem has helped to address a number of challenges that both publishers and DSPs face. Ad exchanges influence RTB to tackle issues with scale, inefficiency and control that plague both parties, so it is worth taking a minute to know what it means and how it can be applied to your digital marketing efforts.
By cumulating and automating access to demand, RTB can deal with the inefficiency publishers come across by working with all the partners directly. In this way, a publisher can now access more than 100 DSPs through a single assimilation with an ad exchange or SSP.
In addition, tools within Ad exchanges let a publisher to implement a set of business rules that automate the procedure like: who can access and purchase the inventory and at what price, furnishing added control to publishers.
How it works
For how this works in practice, let’s take into consideration a gaming application developer that supports in-app advertisements. And assume that the publisher has quickly topped the app store rankings, and is now observing explosive growth in its user base.
Marketers, advertising networks and agencies are all sending inbound enquiries and are interested in buying ads. The challenge is that the developer company isn’t staffed enough to entertain each one of the requests individually, but simultaneously, they do not want to turn away a clear revenue opportunity.
Nothing could be a better example of a publisher who look to an ad exchange that supports real-time bidding as a way to scale monetization, linking them through a single point of integration to hundreds of advertisers.
Advertisers can benefit from RTB too. With publishers merging their inventory into fewer sources, DSPs no longer have to embark upon the fragmentation of supply, a chronological point of friction and incompetency. Gone are the days of ‘spray and pray’. With utmost accuracy, marketers can ensure that they are serving the right impression to the right audience and obviously, at the right time.
Let us continue with the gaming app example above, but this time, approach the situation from an Ad buyer’s viewpoint. A large telecoms marketer has been keeping a close eye on the volatile escalation of this publisher’s latest application and identifies that the audience is a spot-on match for an upcoming marketing campaign.
The marketer shall pull together the parameters and goals for their forthcoming campaign and reaches out to their DSP partner who is associated to the Ad exchange this publisher controls. Soon after the campaign details are conversed and entered into the DSP’s tool, within moments the telecoms marketers’ Ads are now emerging in the hot gaming publisher’s latest application.
So if you are a publisher or an advertiser, it’s worth taking a little time to recognize how RTB might apply to your business. In online advertising industry, there’s a more efficient market to be explored and a great opportunity to capitalize on economies of scale.