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The ABC’s of RTB5 min read

5 min read

[vc_row][vc_column width=”3/4″][vc_raw_html]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[/vc_raw_html][text_output]Real time bidding is here and now considered an essential tool in the Display Marketer’s arsenal. It might be a little acronym-heavy and not especially simple to wrap your head around as a newbie, but for any advertiser who enjoys precision audience targeting and reducing budget wastage (presumably everyone), Real Time Bidding is the way forward.

RTB plugs the gap in inefficiencies with traditional Display inventory buying. Historically, publishers can see up to 70% of their inventory left unsold or sold for a very small price. Now, website owners are able to sell inventory through ad exchanges – in real time – to advertisers who will compete for each impression via auction.

First and foremost, let me introduce the three most prominent entities in the RTB ecosystem:

[/text_output][feature_headline type=”left” level=”h1″ looks_like=”h1″ icon=”adjust”]The DSP[/feature_headline][text_output]

Demand Side Platform. This is the actual technology used, typically by an agency or advertiser, to purchase advertising automatically (or, to use the industry terminology; programmatically). Within a DSP, an advertiser will build, manage and analyse performance for their campaigns. This is also where an advertiser will outline their targeting parameters using the extensive and highly granular targeting options.

Big players include:[/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5168″][gap size=”1.313em”][feature_headline type=”left” level=”h1″ looks_like=”h1″ icon=”adjust”]The SSP[/feature_headline][text_output] Supply Side Platform. Not too dissimilar to a DSP, but intended for the publishers in the ecosystem. An SSP will allow publishers to better manage the inventory that they wish to sell and subsequently connect their inventory to multiple DSPs, ad exchanges and networks, making it available to buy programmatically through a DSP. Publishers have the ability to set a “price floor”, i.e. a minimum price, for their inventory thereby yielding higher revenues.

Big players include: [/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5172″][gap size=”1.313em”][feature_headline type=”left” level=”h1″ looks_like=”h1″ icon=”adjust”]The Ad Exchanges[/feature_headline][text_output]The connecting point between publishers and advertisers. This is pretty much just a wide-open digital marketplace where publishers will make their inventory (impressions) available for auction. Advertisers, applying the targeting settings specified in their campaigns, will then bid on these impressions to seek out the most relevant and valuable users to serve their ads to.

Big players include:[/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5181″][gap size=”1.313em”][feature_headline type=”left” level=”h1″ looks_like=”h1″ icon=”adjust”]The Process of Serving An Ad[/feature_headline][text_output]Let’s take a look at the whole process of serving an ad, involving the guys above.

– A person, any person, visits a website

– His/her browser communicates with an ad server

– The ad server contacts exchanges where publishers have already made their inventory available

– The exchange will hold an auction in real-time

– An advertiser’s DSP will bid on their behalf

– The value of the bid will be determined by the value of the impression. This is dependent on the targeting settings previously outlined by the advertiser

– Advertiser A bids £1.50. Advertiser B bids £2.00. Advertiser B is the lucky winner, paying a £1.51 CPM

– The bidding is complete and Advertiser B has their ad served to the user within milliseconds (18 to be precise, according to Google)[/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5148″][text_output]With the omission of some rather bewildering technological wizardry, that is how an impression is served. Combining the flexibility in CPM prices using RTB with the extensive targeting options now available, it’s no wonder RTB has taken off the way it has. Now, there is a centralised platform through which you can run all strands of your Display strategy. Whether it’s behavioural/contextual targeting to pre-define your ideal customer, or an exercise in prospecting by widely targeting the many billions of users across the ad networks, or remarketing with an even-creepier-than-before level of granularity; RTB will see spend go further across all of these without wasting impressions.[/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5149″][text_output]Inevitably, nothing radical comes about without criticism. Major publishers worry that their inventory is under-valued in the RTB arena and enables advertisers to pay them less for the inventory they offer. These concerns are becoming increasingly soothed by the option to control the minimum price an advertiser will pay, the same way a seller may set a reserve price when they auction an item – the aforementioned “price floor”.[/text_output][image type=”none” float=”none” info=”none” info_place=”top” info_trigger=”hover” src=”5151″][text_output]There is also a lot of talk about the danger for publisher sales teams, who would traditionally negotiate the sale of ad space with a (living, breathing) buyer, seeing their roles becoming defunct. An understandable fear, but it’s important to remember that whilst RTB may have revolutionised media and automated certain parts it, there still needs to be a team behind the progression, implementation and analysis of any campaign. Technology brings opportunity. If the growth of RTB is anything to go by, the requirement for new skillsets, inventory management and account management that RTB brings will be very promising indeed.[/text_output][/vc_column][vc_column width=”1/4″][visibility type=”hidden-desktop”][gap size=”20px”][/visibility][vc_widget_sidebar sidebar_id=”ups-sidebar-2″][/vc_column][/vc_row]