Why online marketers really need to master Real-Time Bidding

Today I would like to reflect on a topic that our customers increasingly ask questions about and which often leads to very animated discussions among marketers: Do we really need ‘to do something’ with Real-Time Bidding?

RTB, a difficult word

Real-Time Bidding - also called RTB by marketing gurus - is the programmed (hence computer operated) buying and selling of online ad impressions through real-time auctions. It is in fact a very easy principle: a publisher puts banner inventory up for online auction, and advertising buyers bid to buy inventory. The highest bidder wins the impressions. All this happens in a process that only takes a few milliseconds, in fact it happens in the time it takes a webpage to load. RTB is a lot like Google Adwords but in this case for display advertising, and in certain markets, this also already exists for radio, television and out-of-home advertising. Hooray! Every marketer could do with more autonomy and a faster time-to-market.

After a first user experience, the enthusiasm that marketers showed at the introduction of RBT in Belgium vanished into thin air. In practice, RTB just didn’t work… Too many people lost too much money. Because of the auctioning principle, the CPM (cost per 1000 banner impressions), which is traditionally very high in Belgium, collapsed. Combined deals - or ‘value packages’ as advertising sales like to call them - were much more difficult to sell in this way. The result? The RTB banners were devalued to some sort of ‘remainder’: the inventory that had not immediately been sold by the advertising world. But also necessary data to enable targeted advertising were minimized and RTB’s reputation plunged. It became 'some kind of a fraud with obscure processes'.

But RTB parties did not give up hope. A steady and continuous flow of innovation convinced important publishers bit by bit of the value of RTB and now, anno 2016, RTB has the same priority as classic advertising deals for several ad reps. Top positions, and even homepage takeovers, can be purchased programmatically via RTB today.

Real-Time Bidding is the programmatic selling and purchasing of advertising space via real-time auctioning

Opaque process 

This reputation of being opaque, well, RTB itself is partly to blame. In the advertising world, we like to make everything really complicated, don't we? In order to participate in RTB you need a trading desk which is connected to a DSP and this DSP buys from the SSP on the media exchange after which an ad server puts the banner on display. Say what? That’s right. RTB requires a lot of technology. But it is precisely this technological basis that implies the tremendous value of RTB.

The exchange principle of RTB

Data for the win 

But let us, in spite of the (historical) bad reputation and complexity of RTB, rather talk about the opportunities that lie hidden in RTB and more specifically in the letter R(eal-time). Because of the real-time character of RTB, and this in combination with the cookie technology of today, enormous amounts of data can be brought along to the auction of banner inventory: are we talking about a mobile impression or a desktop impression? Where does the visitor come from? Which pages has he/she visited? What is this visitor interested in?  

What does all this mean for us, advertisers? We no longer need to buy banner inventory that we believe our target audience will encounter. We now simply buy our target group, and it doesn't matter at all where these targeted visitors will be.

This is not the end of RTB technology. New partnerships with data providers are being formed as we speak. What about only advertising when the weather is good (or bad)? Or with banners that are different depending on which football team has won the match yesterday? These are just some of the possibilities that are already common practice in the markets where RTB has been adopted earlier.

Thanks to data media evolves from a world of business dinners and commission negotiations towards a field of expertise where relevance, creativity and measurability are given the highest priority. An evolution that our online marketers at Perform are indeed very happy to welcome. 

We have only just begun

RTB is only just in an initial stage. Programmatic and data-based purchasing started with the revolutionary Google Adwords and the advent of social media has brought us social advertising where personal data is the key. With RTB, now display advertising experiences this same revolution. But it certainly does not stop at this point. In the Netherlands a significant part of radio and out-of-home is already being purchased programmatically. In TV, broadcasters are investigating how to put their advertising time and audience behavior in a programmatic model.

Real-Time Bidding is a marriage between reason and creativity in a technological society and will become, without a doubt, the new standard in advertising. Therefore, the marketer of the (near) future should learn how to master this expertise. The Reference has already created an RTB center of expertise, where both creatives and data experts work together to make the RTB campaigns of our clients a digital success.

Do you want to know more about this subject? We would love to help you!

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