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If you're new to real-time bidding (RTB) in display advertising, the acronyms can be an obstacle to understanding a fairly simple concept.

It's just like PPC; using real-time auction technology to sell ad space, often to a known or lookalike audience (which you may be familiar with via Facebook advertising).

Real-time bidding is itself a type of programmatic advertising, which is simply a term for advertising bought and sold using software.

Rather than writing another post explaining what all the acronyms mean, I thought I'd sum up the advantages of RTB for display, as this provides a much clearer insight into the theory.

For the past five years, since the publication of the Econsultancy DSP Buyer's Guide and, later, RTB Buyer's Guide, we've been trying to help beginners understand programmatic advertising, as well as provoke debate with some expert opinions (see our programmatic predictions for the future).

If you're interested in diving deeper into programmatic, why not investigate Creative Programmatic, our one-day conference.

Reducing costs and waste

  • Each advert impression can be targeted (usually via cookies), avoiding bulk buying of ad space that could be wasted on irrelevant web users.
  • This targeting makes it easier to accurately estimate the true value of each ad impression.
  • Because web users are identified, real-time bidding software can monitor and enforce a frequency cap across all ad inventory. This means limiting individual users to a specific number of ad views.
  • RTB software allows advertisers to test and learn, exploring how reach and availability fluctuate based on bid price and frequency cap.
  • Bid-forecasting tools allow advertisers to predict the success of their bidding strategies (What reach? Within what segment?).

waste 

Improving performance

  • One dashboard controls the campaign, rather than multiple relationships with publishers.
  • Campaign performance can be observed in real-time, meaning the advertiser can be more agile.
  • Optimising a budget can be achieved algorithmically.
  • Advertising budget can be moved between markets, seeking the best reach and ROI.

performance 

Achieving a more sophisticated strategy

  • The impression-level data obtained allows advertisers to analyse the efficacy with certain consumers, context and creative. This can ultimately lead to a more adaptable strategy.
  • These insights are not isolated within display, but can be applied across other media (search, email etc).

Better targeting

  • Retargeting is made scalable and powerful through impression-level bidding.
  • Creative can be designed specifically for a single audience segment.
  • Customer relationship management (CRM) databases and third-party data can be used for retention or up-sell campaigns.
  • Lookalike modelling allows advertisers to use their own data as a template with which to expand the size of the audience they are targeting.

target 

Protecting the brand

  • Rather than purchasing across a whole ad network, advertisers can stipulate quality levels that match their brand.
  • Ad verification services can help maintain blacklists to try to prevent ads showing in dubious positions.

Integration with other digital marketing channels

  • RTB allows display to be linked with other digital media campaigns, such as video, social, PPC and SEO.

integrate

Consistency of service from a media agency

  • If using a trading desk that is part of the same holding company as the media agency in charge, there could be better integration and consistency of service between the two than there would be if impressions were bought by a third party.
  • With this arrangement, media agencies have more control over spend, which can reduce cost (though some argue it can reduce transparency). 

And to read about some of the potential concerns that people have around programmatic, check out this post that covers the points raised by an expert panel at our previous Get With The Programmatic Conference.

Ben Davis

Published 1 February, 2016 by Ben Davis @ Econsultancy

Ben Davis is a senior writer at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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