Real-time bidding (RTB) is the buzzword of the moment in the digital marketing space. The excitement around this sexy new(ish) way of running display campaigns is on par with where PPC was less than a decade ago.
With more companies investing in the RTB, the number of advertisers entering the RTB space is only looking to go massive.
Traditional vs. Programmatic Buying
Most of the hype around RTB focusses on two things: the targeting capabilities and the auction. To understand why these features are so important, we need to compare programmatic buying to traditional display.
Traditional display buying requires negotiating with publishers and buying an advertising space to guarantee visibility of ads for a specific number of impressions or date range. Advertisers choose websites based on content and predicted audience, but have little to no flexibility for optimization once the campaigns were agreed and launched. This means that the potential for wasted spend on impressions is relatively high.
Programmatic buying allows display inventory to be released to auction. Advertisers can choose to purchase ad inventory based on highly qualified audience targeting, and only bid on available impressions when their targeting methods match the available impression.
The option to bid for inventory only when the appropriate audience is available means advertisers can be much more precise in their targeting and more effective in spending their budgets. The process of a user visiting a website to an advertiser serving an ad takes place in 100 milliseconds.
The speed and accuracy of this real-time bidding model provides a massive opportunity to advertisers who may not have been able to spend their advertising budgets effectively with traditional display buying.
Optimization, Also in Real-Time
While the auction taking place within 100 milliseconds is a very exciting and much discussed benefit of real-time bidding, the process which takes place after launch of RTB display campaigns is what really allows advertiser budgets to go the distance.
Demand-side platforms typically allow for highly targeted campaigns, which is fantastic. However, it is up to the campaign managers to ensure return on investment is reached.
The option for real-time (or very close to real-time) data from these campaigns allows for optimization to be undertaken from the day of launch, and gives advertisers the chance to see real improvements in campaign performance. Fast.
Recently we ran a two week RTB campaign for one of our clients, and within just this short amount of time, the real-time optimization tools meant we could make changes efficiently and effectively, improving click-through rate by a whopping 6.5x.
It’s not just hype. Real-time bidding really is set to become huge.
The chat between industry leaders is focusing on the move from targeting keywords and placements to targeting audiences. Expect programmatic buying products and services to pave the path for advertisers to achieve high returns which may not have been possible with traditional display.