How does RTB Display advertising work
If you have found yourself trying again and again to understand how rtb advertising platform works, we at least can calm you down as you are not the only one with this problem. The pieces of information spread on the Internet are weakly adopted for newcomers, but we have something to tell you and hope that the issue will become less complicated.
Before Real Time Bidding all advertisements were bought and sold on fix rates, it could be CPM (Cost Per Mile), CPC (Cost Per Click) or some other variants. The process was quite expensive and couldn’t bring tons of money as networks and platforms of that time took quite big commission.
Everything has changed with RTB. The Advertiser estimates himself the price of each ad and makes biddings exactly at the moment of potential displaying. Publishers sell their inventory on specially organized fairs where this stuff is later bought. DSP tool is often used by Advertisers for this purpose. Main advantage of it is that it becomes possible that own data can be used to create complex algorithms for biddings optimization.
An example to see the picture clearer
Let’s imagine that you sell expensive fashionable shoes. Certainly you are interested in women of 27- 39 years old, but the problem is that the same target audience will be for baby goods as a lot of ladies in this period are mothers of young children. Here everything will be very simple: who offers higher rates, that will win the competition.
The deal is so quick that one is unlikely to winkle when everything is already finished. On the backstage the Advertisers are informed about each users appearing and all the feature he or she has. After studies, the Advertiser make decision about the prices – mere seconds and the winner is found. The procedure will be launched again with every new visitor.
Main concept of RTB advertising platforms is to make ads personalized. It is silly to shout in the crowd with hope that there will be somebody who may get interested. Marketers are searching the ways to save money and efforts and, thus, try sending ad messages to those who is more likely to feel interest in them.
Besides, no one would ignore such tendency as advertising blindness. At the time of Internet appearing all the pages were too overcrowded with different ads. As a result, we have several companies that make money on preventing users from advertising. It should have happened as otherwise the Internet would be certainly destroyed by those who feel enormous irritation.
RTB offers advertisement being useful, relevant and prompt. It is expected that users and marketers can find a point to live in piece. Nowadays the advertisers start understanding that their task is not simply to sell a pup, but be helpful for their clients and resolve the most important problems.
One immediate question
You might have thought about situation if there are less Publishers on RTB than Advertisers. Main advice here is not to choose such platforms. You definitely need huge solutions to cover as bigger audience as possible.
You may get surprised, but Publishers are even more interested in RTBs than you, it is because:
- the expenses for hiring a selling team are whittled up to zero when using RTB;
- media coverage is enormous, RTB is more profitable than direct sales or media planner inviting;
- coverage of segments of target audience will be more beneficial than traditional publishing the ads on common resources.
What is the main lesson here? Well, at least RTB is a good way of Publishers to get more money and the amount of platforms will be growing exponentially.
by Jess Young