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Sunday, February 9, 2014

HOW REAL TIME BIDDING, DSPS, SSPS, AND AD EXCHANGES WORK


Let’s say you’re online one day and decide to do a little shoe shopping. You navigate to your favorite store, check out a pair of boots, add something to your cart and just as you’re about to checkout, the phone rings and you get distracted.  By the time you’re done talking to your friend, it’s late and you decide to buy the shoes later.
Then, the next day, you check to see who won the big game last night and you notice an ad from the shoe store you were on last night.  Not only is it an ad for the store, but the exact pair of boots you were looking at are in the ad!  Weird.  You decide to check your email and see that your mom sent you a link to a news article. You go to read the article and staring you in the face on the page is another ad for the same pair of boots, this time tempting you with a 10% discount!
How did the ads know you were shopping for shoes last night, and how did they wind up on all those different sites?  The answer is, probably through an ad exchange.
Ad Exchanges have been around for a few years, but have exploded in importance in the last year.  Along with Demand Side Platforms (DSPs) and Supply Side Platforms (SSPs), Ad Exchanges are dramatically changing the way digital media is bought and sold. If you are a digital marketer or publisher, it is a very exciting time to be working in the industry.
What makes these companies so innovative is how they allow buyers and sellers to value inventory on an impression by impression basis and in real-time.  That’s right, real time.  That means that when you clicked on your mom’s link to the news article and your browser requested an ad from the news site, the publisher put that ad up for auction on an exchange, marketers bid on that impression, and it was served to your browser in about 50 milliseconds, so fast it was indistinguishable from the time it took any other image on the page to render.  Welcome to the world of real-time bidding, or RTB, where marketers value each impression as it is created and the Ad Exchange is where it all happens.
source: http://www.adopsinsider.com/

Friday, January 24, 2014

New insights into Real Time Bidding


THE PROBLEM

Traditional online display advertising is inefficient.
For Advertisers, the cpm model of buying impressions in bulk is lacking because you are purchasing impressions for the same price per unit, even though each one has a different value to your campaign.
For Publishers, traditional display is inefficient because up to 70 % of their inventory is left unsold or sold for next to nothing. Further, for many small publishers, also known as ‘long tail sites’, there isn’t a sales team which can properly sell their quality, targeted inventory, leaving them wanting more from display.
As you can see, display advertising needs a shakeup to provide more value to both advertisers and publishers.

THE SOLUTION: REAL-TIME BIDDING

RTB allows display inventory to be purchased by the individual impression through a bidding system that unfolds in the milliseconds before a webpage is loaded by a consumer. The targeting and cost efficiency opportunities presented by RTB are making it a revolutionary force in the online advertising landscape.

HOW DOES RTB WORK?

There are 3 prominent players in the RTB landscape:

The Demand Side Platform

The Demand Side Platform (DSP) is a tool that automates the purchasing of online advertising on behalf of advertisers. Advertisers use DSPs to set the buying parameters of their campaigns and to monitor campaign performance.

The Publisher

The publisher provides the inventory. Originally, real-time bidding was only used on unsold remnant inventory, however it is being increasingly used on premium inventory due to advertiser demand and the higher revenues it is yielding for publishers. Some publishers may use Supply Side Platforms, or SSPs, to help better manage and sell their inventory.

The Ad Exchange

Ad Exchanges are often compared to stock exchanges, however an ad exchange is really a software tool that connects advertisers and publishers, facilitating the purchase of display inventory in real-time through auctions that take place in the milliseconds before a page loads. It is through these auctions that publishers are able to maximize the price for their inventory, while advertisers are able to purchase individual impressions at prices that reflect each impression’s value to the campaign.

The Real Time Bidding Process

At its most basic form, the RTB process unfolds like this:
  1. The publisher provides its inventory to an Ad Exchange, who is responsible for holding an auction, during which the DSPs, on behalf of the advertisers, will place a bid on each impression.
  2. The value of the bid is based on the value of that impression, as determined by the advertiser’s parameters with the DSP. The bidding process ensures that each impression is sold at the maximum price, as dictated by real time market demand.
  3. Once the bidding is completed, the winner is chosen and the ad is served on the publisher’s website.

WHAT ARE THE BENEFITS OF RTB?

What are the benefits for agencies?

  • Increased control over campaign performance
  • Increased spending efficiencies
  • Better results delivered for clients

What are the benefits for advertisers?

  • Enhanced consumer targeting capabilities
  • More cost effective reach and frequency
  • Near elimination of wasted impressions and ad dollars

What are the benefits for publishers?

  • Delivers higher revenues on inventory through opening that inventory to a buying market designed to maximize the value of each individual impression.
As you can see, real time bidding presents some amazing benefits for both buyers and sellers of online display advertising – are you taking advantage?

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