Prepared by Tug ltd.
25th March 2013
Author: Turan Kasimova, Senior PPC Account Executive at Tug
RTB Display is the automated process of buying and selling online display advertising in real time, incorporating enhanced solutions in targeting algorithms and data analytics in order to deliver better targeting, greater control and more granular campaigns (Parks Associates, 2012). RTB inventory can only be accessed via Demand Side Platforms (DSP’s) which are online media exchanges, or media marketplaces, connecting sellers (publishers) and buyers (advertisers).
RTB Display has quickly become a digital buzz word, with worldwide RTB-based spending being predicted to grow from $1.4 billion in 2011 to $13.9 billion in 2016 (Pubmatic, 2012).
So what makes RTB so attractive for online advertisers?
Bulk Buying vs Micro Segmentation
Traditional online display buying relies on buying the impressions in bulk. This means that impressions on a style website can be lumped together with impressions on a finance site. As a result, the advertiser cannot effectively reach the targeted audience. While this can be less of a problem for global advertisers, the lack of transparency becomes a real nightmare for an advertiser with a niche product targeted to a precise audience.
With RTB bidding, the advertiser buys individual impressions on DSPs which allow the micro-segmentation of the market through pre-selected categories and contextual keywords or desired placements, leading to more efficient targeting which benefits both publishers and advertisers, as well as providing a better offering for consumers and as a result, higher click through rates and conversion rates.
Negotiations vs Free Market
When it comes to buying inventory on Traditional online display, negotiation skills are an absolute must have. Website placements and more importantly prices are not dictated by market forces, but through negotiation on final publisher offer.
In some areas such as charity advertising, it allows the buyer to get premium placements on highly relevant pages. For example, Tug Agency placed advertising for the mental health charity Mind on the Channel 4 and Guardian mental health pages.
The publisher however would usually charge premium price for this service.
RTB removes the middle man and connects publishers and advertisers directly across media exchange, hence transforming online display into a free market where buyers pay per impression, the price of which is determined by supply and demand. As a result, lower CPMs can be achieved through RTB.
Many advertisers will be attracted by low RTB CPMs. However, it should not be forgotten that power of negotiation can be used to buy those guaranteed placements on premium relevant web pages.
Optimising for desired KPIs
Optimising on Traditional online display can be tricky, as advertisers have no control except for the number of impressions that are shown to visitors. All optimising is in the hands of the publisher, and while some optimise a great deal to achieve advertisers’ goals and meet customers’ needs, others may not optimise at all.
RTB allows advertisers to optimise based on specific KPIs. For instance, underperforming placements can be excluded, and negative keywords that would provide brand safety can be added.
Does reporting matter?
Similar to optimising, reporting on Traditional online display is done by the publisher, and as a result they have the right to provide advertisers with as little or as much information as they consider appropriate. At Tug Agency we have seen very detailed reports from some publishers and reports with hardly any details from others.
With RTB display the advertiser can get as much information and analysis as they require. The vast majority of DSPs would allow the advertiser to report on the following:
— Traffic Volumes
— Cost per Click (CPC)
— Click Through Rate (CTR)
— Conversion Volumes (post click & post impression)
— Cost Per Action (CPA)
— Conversion Rate (impression & click)
— Return on Investment (ROI)
— Playbacks (Video)
— Duration of Play Back (Video)
— Likes (Social)
— Social Shares
This of course allows the advertiser to not only get a detailed report on activity, but also optimise towards the set goal and plan for future activity effectively.
RTB is also starting to claim more revenues in the online advertising industry, and Parks Associates predict that by 2017, it will account for 34% of all online display ad revenues.
Given these strong benefits, it is definitely time to take RTB into consideration when planning display activity.
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Published on: 12:05PM on 25th March 2013