September 12, 2017
An Introduction To RTB And Programmatic Ads
Initially, the process of online advertising was pretty direct wherein an advertiser or an agency representing that advertiser, would buy ad space from the publishers on a website. With time, as the network grew, these publishers created several web pages, with several ad spaces that unfortunately went unsold. Every visitor who visited these web pages was shown the same ad with no measure for distinction. It did not matter if the ad was served to meet the visitor’s purpose or interest- it was simply shown regardless. This became increasingly irritating for viewers and led to the establishment of a more valuable and cost effective approach to advertising. This is where RTB or Real Time Bidding and Programmatic Ads come into play.
What is Real Time Bidding?In simple terms, Real Time Bidding or RTB as the process is more commonly known is the action of buying or selling an ad space via an auction. This auction takes place in milliseconds i.e. the time it takes for a webpage to load. Advertisers or agencies on behalf of advertisers compete for an impression or ad space with the help of automated bids. The highest bid naturally wins the auction and that particular ad is then displayed immediately on the webpage.
How does RTB work?Various parties are involved in the RTB process such as the publisher, the supply side platform (SSP), the ad exchange, the demand side platform (DSP) and the advertiser or agency. The process begins with the publisher (website/ webpage) sending a message to the SSP that they have an impression (also called ad space) available. The SSP then analyses user information such as location, web search history, age, gender and any other information available and sends it to the ad exchange. The ad exchange then transmits this information to the DSP and the auction begins. The DSPs bid on the available ad space based on what that space is worth to them. The DSP decides how much a space is worth on the basis of parameters set by the advertiser. The highest bid is sent back to the publisher and that ad is displayed to the viewer. [caption id="attachment_5628" align="aligncenter" width="681"] http://clearcode.cc/wp-content/uploads/2015/01/rtb.png[/caption]
What is Programmatic Ad Buying?In simple terms, programmatic is an automated process of media buying and ad placements on the Internet. It is known to be highly efficient and cost effective because it removes the chances of human errors and inconsistency. Programmatic advertising/buying uses modern intelligence technologies to analyse the behaviour of the audience. In this method, advertisers have increased control to define user metrics like demographics, geography etc so that they can reach the right audience at the right time. RTB is a type of programmatic ad buying.
How does Programmatic Ad Buying Work?It includes SSPs, DSPs and DMPs (Data Management Platforms). DSPs facilitate ad buying and help you bid to reach the right target audience. DMPs collect and analyse user cookie data and SSPs are responsible for selling ad inventory.
Benefits for Advertisers:
- The capability to target consumers is enhanced
- More cost effective
- Increased control over campaign performance
- Better spending efficiency
- Highly optimised results
Benefit for Publisher:
- Higher revenue, as the market is designed to maximize the value of every impression
- Almost zero wastage of impressions