Friday, January 24, 2014

New insights into Real Time Bidding


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.


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.


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 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?

Get a better handle on how real time bidding works and who is involved by browsing these key terms below.
Real-time bidding (real time advertising): a method of buying online display advertising in which publishers release impressions to be purchased individually, in an auction environment.
Ad networks: an entity that connects buyers and sellers of online advertising impressions. These companies can facilitate the purchasing of real time ad inventory.
Demand side platform (dsp): these entities allow advertisers to manage their purchasing of online display advertising in real-time. DSPs purchase advertising for the advertisers through ad networks and exchanges. DSP functionality varies, and includes things like allowing advertisers to manage their bid amounts, performance metrics and consumer targeting.
Online display advertising (online banner ads): online advertising that appears on top of or alongside the content of a webpage. This type of advertising utilizes banners which come in the standard sizes of 300×250, 728×90 and 160×600.
Targeted advertising: a form of advertising in which ads are delivered to consumers based on demographics and geography, as well as other factors like interests and purchasing behaviour. Real time bidding has enabled online display advertising to become more targeted through the use of first and third party data.
Online contextual advertising: online advertising which is selected to appear on a particular webpage because it is a match for the content of the page.
Behavioral marketing (behavioural targeting): this term refers to several ways in which online advertising campaigns are made more effective by taking into consideration the actions of the consumer. Data needs to be collected to facilitate this process, and what is collected will vary based on the desires of the advertisers.
Supply Side Platform (SSP): an entity that works with publishers and advertisers to release impressions into the real time bidding ecosystem to be purchased by DSPs or other agents.
Second Price Auction: an auction format in which the bidder who offers to pay the highest price pays only the price of the second highest bidder. This system is used in most RTB ecosystems.
Cookie Caching: collecting the cookies of visitors to a webpage for the purpose of making more informed buying decisions about that consumer’s impression.
Retargeting: the process of adjusting your online advertising creative, as well as purchasing strategy, based on the actions of consumers. The simplest example is spending more for the impressions of consumers who have not completed an order form on your website, as well as showing them a more influential creative.
Tagging a Page: the process of adding a piece of code (referred to as a ‘pixel’) to a webpage (usually the landing page and key pages for a campaign) which collect data on the visitors to those pages. This data is then used to make more informed buying decisions later on.
Ad Server: a technology used to store online display ads, then subsequently deliver them to a consumer on a website. This company’s purpose is to maximize revenue for the publisher and/or advertiser, as well as manage campaigns.
Brand Safety Technology: this technology is used to classify the content of webpages and to allow advertisers to avoid running their campaigns on pages which carry content they deem to be ‘negative’ for their brand.
Prospecting: the process through which an RTB campaign is implemented so that promising consumers are sought out so that they can be retargeted throughout the campaign.
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