Real-time bidding (RTB) refers to a process in advertising that involves purchasing and selling ad impressions online on a per-impression basis through real-time or programmatic auctions. These auctions occur in the time it takes for a webpage to load. Advertisers place a bid on an impression, and the ad of the highest bidder is displayed instantaneously on the publisher’s website. In this article, we offer a more in-depth look at real-time bidding.
Real-time bidding has completely changed shape of traditional online display advertising. It involves many layers of data in order to target ads in real time with extreme accuracy. Through real-time bidding, countless advertising opportunities are processed in milliseconds the opportunities that are the best for both your budget and your audience is determined.
To a new marketer, or even to one who is established but is looking for new ways to expand their advertising game, at first glance, real-time bidding might seem confusing. However, when the process is broken down, it’s actually quite simple.
What is Real-Time Bidding?
Real-time bidding is a process that enables advertising inventory to be bought and sold on a per-impression basis. This process occurs through programmatic auctions that work much like financial markets. These programmatic auctions are typically facilitated by:
- Ad exchanges. A digital marketplace that allows advertisers and publishers to sell and purchase ad space.
- Supply-side platforms. Software that automated the selling of advertising space.
- Demand-side platforms. Provides advertisers access to various sources of inventory.
Through real-time bidding, advertisers have the opportunity to both manage and optimize ads from various ad networks because they can give users access to various networks. This allows them to develop and launch ad campaigns, prioritize networks, and distribute certain amounts of unsold inventory.
How Does Real-Time Bidding Work?
The process involved with real-time bidding is actually pretty straightforward. A transaction usually starts when a user visits a website. Once the user visits a website, a bid request is triggered. This request highlights important information; the demographic details of the user, his or her browsing history, location, and even the page that the user is trying to load.
This information is passed to an ad exchange. The ad exchange then auctions that information off and awards it to the advertiser that has placed the highest bid. The ad of the highest bidder is loaded onto the user’s webpage almost instantaneously; in fact, the entire process, from start to finish, takes mere milliseconds to complete.
Typically, advertisers use demand-side platforms to determine which ad impressions would be beneficial for them to purchase, and how much they should bid on those ad impressions. Several factors are taken into consideration when determining when ad advertiser is determining which ad impressions to purchase and how much they should be. Some factors include:
- The sites they appear on
- The past behavior of the users who are loading them
The price of impressions is pinpointed in real-time and is based on how much bidders are willing to pay; hence the term “real-time bidding”.
The Benefits of Real-Time Bidding for Advertisers
In the most basic terms, the biggest advantage of real-time bidding is that it allows for extreme efficiency. Advertisers have the opportunity to choose exactly where their ads will be placed. For publishers, they have the advantage of contextual ad advertising, which improves conversion rates.
Before real-time bidding, advertisers kind of threw shots in the dark when it came to placing their ads. For example, if an advertiser who sold shoes wanted to reach an audience that was interested in buying shoes, they would purchase ads on apparel-related websites. While this may have allowed them to reach an audience that was interested in buying shoes, they weren’t necessarily reaching the right audience, or the audience that would convert.
Real-time Bidding and Publishers
When real-time bidding was first introduced, many publishers were wary of the process. A lot of publishers believed that it allowed advertisers to pay them less for the advertising inventory they offered. However, as real-time bidding has become more established and more commonplace, publishers have grown more comfortable with the process. Ad exchanges and supply-side platforms give them greater control over minimum prices that their inventory is sold for. This allows publishers to set a reserve price that has to be met for a transaction to occur when they open their inventory up for an auction.
Real-Time Bidding Tips
If done correctly, real-time bidding can help to enhance the success of your display marketing campaign. In order to ensure the best results, here are a few things that you should take into consideration.
- Choose the right platform. There are tons of platforms available. You might have to access several in order to see real results. It might be tempting to go after the biggest names, but for the best outcome, focus on the following elements:
- Features and functionality
- Source the Best Skills. If you want to make the most of real-time bidding, you should take advantage of the skills that professionals can offer you. For example, there are specialists and agencies that offer a tremendous amount of knowledge and skill that can make the most of the real-time bidding process.
- Be Committed. Just like most things in advertising, it is going to take some time to see results. If you aren’t seeing instant results, don’t throw in the towel. With patience and commitment, you will start to see the benefits that real-time bidding can offer.
Summing it Up
Real-time bidding may sound like a really complex process, but in reality, it’s quite simple. Once you have figured out how it works, you can take advantage of all the benefits that it offers and see a huge increase in your advertising efforts and a significant boost in your success.