Real-time bidding (RTB) has completely changed the online advertising landscape. It allows advertisers to bid on ad space in real-time, as users are browsing the web. This means that ads can be targeted to specific users based on their interests and demographics.
RTB has made it possible for small businesses to compete with large brands for ad space. It has also allowed marketers to target their ads more effectively than ever before. In this blog post, we will discuss what RTB is, who uses it, and how it has changed marketing forever!
What is real-time bidding and how does it work?
Real-time bidding (RTB) is a way for advertisers to buy and sell ad space on a per-impression basis, via real-time programmatic auctions, similar to how stocks are bought and sold on financial markets. Advertisers place bids on the publisher inventory they want, while publishers use automation software to sell their ad space to the highest bidder.
This whole process happens in real-time, hence the name “real-time bidding”. RTB is seen as a more efficient way to buy and sell ad space, as it allows for laser-targeting of audiences and transparent pricing.
It can be used for display advertising, video advertising, or even native advertising and can work with any type of digital advertising format. It can even be used for offline advertising, such as connected TV or radio ads.
Overall, real-time bidding is a win-win for both advertisers and publishers – advertisers get better results (higher ROI) from their campaigns, while publishers make more money from their ad inventory.
Who uses RTB and why is it beneficial for them?
RTB is used by both large and small advertisers, as well as ad networks and publishers. RTB is beneficial for advertisers because it allows them to target specific audiences with laser precision.
For example, an advertiser might bid on ad space for users who have previously visited their website or who have searched for a particular keyword. In this case, the advertiser knows that these users are already interested in their product or service, and so they are more likely to convert into customers.
RTB is also beneficial for publishers because it allows them to sell ad space to the highest bidder, which can help to increase revenue. In addition, RTB is transparent and efficient, which helps to create a healthy ecosystem for all involved parties.
From a publisher’s standpoint, for example, it’s important to know that an advertiser is only paying when their ad is served to a user who is actually interested in it. This way, the publisher knows that they are getting paid for quality traffic, rather than just quantity.
Real-time bidding platforms for advertisers
- AdRoll
- MediaSmart
- theTradeDesk
Real-time bidding platforms for publishers
- Magnite
- Index Exchange
What does real-time bidding mean for businesses and consumers alike?
In real-time bidding, advertisers compete against each other in an auction to have their ad displayed on a website or app. The auction takes place in real-time, and the ad space is sold to the highest bidder. This system provides numerous advantages for businesses, including greater control over where their ads are seen and the ability to tailor their ads to specific audiences.
Thanks to real-time bidding, companies can respond to consumer behavior instantaneously. This means that businesses can quickly adapt their marketing strategies to take advantage of current trends.
However, real-time bidding also has some disadvantages, such as the potential for higher advertising costs and the need for businesses to have a deep understanding of programmatic buying.
For consumers, real-time bidding may lead to more targeted ads. It also allows people to have more control over what advertising material they are on the receiving end of.
However, RTB raises some security and data privacy concerns, since it involves the collection and use of large amounts of consumer data. Despite these concerns, real-time bidding is here to stay and is likely to become even more prevalent in the coming years. Businesses and consumers alike will need to adapt to this ever-changing landscape.
Examples of real-time bidding
Let’s take Sephora, for example. Let’s say Sephora is looking to target women aged 25-35 who live in the United States and who have an interest in beauty products.
They set up a Demand-Side Platform (DSP) and buy ad space on a publisher’s website through an ad exchange. When a user visits the website, Sephora’s DSP recognizes that the user meets their target criteria and so they enter into an auction to have their ad displayed.
Then, a user visits the publisher’s website. When they enter the site, an auction is triggered and Sephora’s DSP recognizes that the user meets their target criteria. Then, the Supply-Side Platform (SSP) sends Sephora’s ad to the ad exchange.
The ad exchange then compares the bids from all of the advertisers who are interested in that particular user and selects the highest bidder. In this case, Sephora is the highest bidder and so their ad is displayed to the user.
Final Thoughts
Real-time bidding has changed the landscape of marketing forever. It has given businesses greater control over their advertising and has allowed them to target specific audiences more effectively. However, it has also raised some concerns about data privacy and security.
Despite these concerns, RTB is here to stay and is likely to become even more prevalent in the coming years. Thus, businesses and consumers alike will constantly adapt to this ever-changing landscape.
