What is Real Time Bidding

What is Real Time Bidding

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Internet is a very interesting part of online world. Like a living body, it grows, evaluates and adopts new features. Modern marketing is like a young gentleman: it has a lot of things in its basement from previous forms, but is completely different to them. The point is that due to evaluation and growth we have too many different words, notions and abbreviation it may seem difficult not to lose the common sense of it.

Real-Time Bidding advertising is one of the things on trend. A lot of people talk about it, but not so many really know what it means. Luckily, you can join the group of those who understand what the buzz is about after reading our article.

A bit from advertising history

When the art of Internet advertising has just started, it was a common practice for companies contact websites owners directly. The approach is still used by small businesses, especially if you have too specific product. The problem is that the traffic you get from it can be very scanty. Besides, all negotiations took time as well as changes in the campaign, that might be a problem if you need amendments right now.

The situation seemed a bit better with advertising networks appearing. They performed an intermediary function for publishers and advertisers. The process looked perfect at the first sight: you need to sign up, set details for your campaign and press “start” button.

However, there is a fly in the ointment: you could buy displays on the websites where your potential audience may hang out. But, just think, if you have dropped into a website about fictile art, you may be not interested in buying pottery wheel as you have just wondered how things are. Such situations may happen quite often and is definitely a waste of money.

Also, you should mind that advertising networks take some fee for their services, reports and equipment use. It makes ad campaigns more expensive for advertisers and publishers could also earn more from their websites.

One more problem is that the cases of fraud and cheating are, unfortunately, often there.

Time when changes were in need

RTB in comparison with traditional ad networks offers more personalized approach. When surfing the Internet we leave some shade that can help product owners to identify us among thousands of other users. Generally the information collected is anonymous and contains information about our location, approximate age, type of the device we use, previously visited websites, interests and so on.

When RTB is involved, advertisers are always informed when a new visitor enters the website plugged into the system. They can see the information we have discussed and, according to it, make a decision about value of this particular person exactly for the company and how much everyone is ready to spend for showing to him or her the ad of the product. The advertisers start bidding and the winner is defined by the highest price. The ad is shown and everything will be repeated with a next user. If you haven’t guessed yet, the business lasts less than a second, when a page is loaded.

As you can see, human interaction is hardly possible here. Artificial intelligence and complicated algorithms are used to perform the procedure. The technology used for RTB functioning is called programmatic.

As you can see, it can be compared to traditional auctions, like Christie’s. And, in the same manner, it can be open and private. We have already discussed functioning of former one. Private auctions technically work in the same manner, the only difference is that the publisher there are huge tycoons like “The Daily Telegraph” and they offer premium inventory to sell premium advertisers they choose themselves.The prices here are higher, but the quality of the traffic writes itself.

Why you need it?

  • – You have no mass affecting, especially n those who are not interested in it;
  • – As a result, people are more loyal to ads as it is not a random selection, but something that corresponds their interests and needs, thus, you will have more clicks;
  • – Advertisers spend less money on the campaigns and publishers also earn more, because no third party is involved.

RTB is conquering the market and traditional forms are unlikely to die out, but to change the form existing significantly.

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