RTB stands for Real Time Bidding. It’s a form of online advertising that uses real time data to serve ads on websites or mobile applications. This kind of marketing allows advertisers to get the most relevant leads possible with their campaigns by using cookies and other information about users’ browsing history.
The best way to understand what RTB actually means is through an example, so let’s look at how it works in practice.
Let’s say you’re shopping for shoes online, and while looking at some sneakers you see an ad pop up from the company who makes them saying they have a special promotion going on right now – buy 2 pairs of sneakers get 1 free! You might think nothing of it until you realize your friend just bought 3 new pairs last week!
- 1 What is rtb advertising?
- 2 The Difference Between Real-Time Bidding and Programmatic Advertising
- 3 Who’s Involved in Real-Time Bidding?
- 4 How RTB works
- 5 Why should you use RTB advertising to grow your business
- 6 How to set up an account with a site that offers this service, such as Google or Facebook
- 7 What is the issue with this selection?
- 8 FAQ
- 9 Conclusion
What is rtb advertising?
Introduction to real-time bidding (RTB)
Real-time bidding (RTB) is the use of automated technology to buy and sell advertisements. These ads are based on walled garden inventory or publicly traded marketplaces available for publishers.
The process is automated through all parts of the ad delivery system via APIs, thus connecting demand sources with supply destinations. RTB makes it possible for advertisers to buy ads at the optimal time.
To achieve greater efficiency, advertisers can also use RTB to bid on ad impressions in real-time auctions to determine which advertisement will be shown instead of poorly targeted old-fashioned strategies like banner rotations.
RTB can be complicated, and most likely requires the help of an ad-serving platform. Many web sites use these ad serving platforms to display their online advertisements. Advertisers can work with these ad serving platforms or directly with publishers (the companies that host the ads on their websites).
The Difference Between Real-Time Bidding and Programmatic Advertising
Ever wonder why your web ads were served in a way that didn’t seem to make sense? Visitors exiting the site immediately following an ad impression, or vice versa? Publishers may be using real-time bidding (RTB) technology to try and maximize revenue for each ad impression.
Ad contracts are being bought and sold within milliseconds, and placed through RTB platforms. Normally, ad campaigns are set up before the campaign begins. Planning goes into demographic and geographic targeting and delivering an agreed-upon message based on the site content and audience.
Campaigns often take days or weeks to execute. With real-time bidding, information about how a consumer interacts with a publisher’s site is sent to a bidding platform. This platform then selects the best ad campaign and exchanges currency with the advertiser for an ad impression.
Because RTB platforms exist as a marketplace, publishers have several options from which to choose from, making them more competitive than their traditional counterparts.
Who’s Involved in Real-Time Bidding?
Publishers – Publishers are responsible for creating, hosting and delivering their content to the consumer. Some RTB suppliers integrate directly with ad servers already in place on publisher sites, while others require publishers to establish new integration points between their existing systems and an additional RTB platform.
Using the same technology that fuels stock trading, real-time bidding allows advertisers to bid on ad space in milliseconds. Here, a photo from Nike’s website is tagged with information that lets publishers and advertising platforms determine how the image would look as an ad.
Advertisers – Advertisers can now buy ad space for their products and services in real-time across thousands of websites, making it much easier to target specific types of users. Because auctions occur in milliseconds, advertisers can adjust bids in real-time to maximize exposure for their messages.
Ad Networks – Ad networks are RTB platforms that aggregate publisher inventory and present it to the ad marketplace. Some networks operate globally, while others are regionally focused.
How RTB works
Before a web site loads an ad, it calls out to a bidding exchange. The bidding exchange responds with all the ads that are available for display on the web site at that moment.
The algorithm is not entirely random: all the bids contain information about both the advertiser and its ad, so consider relevancy when placing your bid.
The ad serving platform (the web site’s advertising partner) chooses the highest bid, thus awarding the ad space to that advertiser. Real-time bidding auctions take place simultaneously for every web site page that an advertiser wants its ads placed on. This ensures that advertisers are paying only for highly targeted audiences.
Ads are displayed on a webpage based on ad serving platform’s behalf. The algorithms that determine which ads are displayed and where they appear are complicated, but it all happens in a matter of milliseconds.
Why should you use RTB advertising to grow your business
The majority (55%) of all internet advertising is traded via real-time Bidding. Advertisers and publishers alike are turning to this innovative method for ad buying, because its highly targeted nature leads to high click-through rates and conversions.
In addition, with so many RTB exchanges opening up all over the world, using an RTB platform will allow you to expand your ad footprint and target international audiences.
Real-time bidding allows you to maximize your ad budget because it ensures that your ads are being displayed in front of qualified, interested audiences at all times. It maximizes the value of an online campaign by eliminating wasted clicks and impressions generally associated with traditional display advertising campaigns.
How to set up an account with a site that offers this service, such as Google or Facebook
First you need to create an ad serving platform account. Then, create your ads and place the creative on your site; usually this process is facilitated by site’s ad serving partner.
Once placed, open up a new account (it costs nothing) with one of the dozens of RTB exchanges like Google or AppNexus. You will have to provide the ad serving platform you are already working with to have them push your ads out on their exchange.
Once you are set up, simply choose which RTB exchange(s) to work with, and monitor which exchanges are performing well for you. You can also prioritize certain exchanges over others.It is recommended that advertisers experiment with different RTB exchanges until they find the one (or ones) that work best for them.
When it comes to setting up an account, you can either set your campaign parameters manually or use an automated system within the RTB exchange platform.
For example, you can opt to have certain ads displayed based on time of day and even geography! This is a great way to target specific audiences in different cities and countries.
What is the issue with this selection?
Benefits of RTB advertising
More affordable – RTB simplifies the process of buying audience-targeted ads, making it easier for small companies to compete with larger ones.
Higher ROI – Advertisers are able to maximize their marketing budgets by finding the most cost-effective way to reach consumers based on specific audience behaviors. With traditional ad campaigns, advertisers pay to reach people who may not even be interested in their products.
Better targeting – Advertisers can target specific sites, publishers, devices and users based on demographic data supplied by the publisher or third parties. With RTB, advertisers can create custom consumer profiles so they only show ads to qualified leads.
RTB is a great option when you don’t have time to make specific ads for your audience, when your budget is not large enough to sustain an “old school” ad buying campaign, and also when you want a highly targeted campaign that combines both online and offline elements.
It is worth mentioning that the more time you dedicate to your campaign, the better results you will get. Testing different ads on various platforms with various budgets is always beneficial for advertisers of all sizes.
Drawbacks to using RTB advertising
Real-time bidding can’t be compared with traditional ad buying. This system requires time to set up and test, so patience is necessary. Also, for this type of campaign to work well, advertisers need to post quality ads.
The auction process means that your ads might get displayed alongside less than desirable content. That being said, the benefits outweigh the drawbacks.
Publishers – Publishers may not be able to control the appearance of ads. Since advertisers and ad platforms are involved, there is a delay between when an ad is requested and when it appears on a page.
This means that publishers often have no direct control over where ads appear or how many ads they will ultimately serve; RTB creates competition.
Bottom line: real-time Bid advertising provides advertisers shortcuts they wouldn’t have had otherwise, often resulting in greater success