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Real-Time Bidding (RTB) Rules

By:   Date posted: November 8, 2012

Real-time-biddingReal-time bidding, or RTB, is no longer just a catchphrase in the world of digital media. The demand for ad inventory purchased through the data-driven model has been on the rise and key players in the industry are responding, as is evident by Facebook expanding its advertising offerings to include RTB through the Facebook Exchange (FBX).

Advances in technology and the ability to have instant access to data analytics is the driving factor behind the success of RTB and its growing popularity. The automated process takes milliseconds to connect sellers and buyers, check available inventory against bids, select the highest bidder and ultimately serve the advertisement. The system allows for better targeting with the ability to optimize campaigns in real-time while providing access to more valuable and previously unavailable inventory.

The Advantages for Buyers

  • Ability to buy impressions based on the audience that meets your demographic instead of buying impressions in bulk based on content that may be of interest to your audience
  • Lower CPMs through the bidding process and having the ability to set a maximum bid to control cost
  • Opportunity to leverage information from multiple data providers and overlay that data as needed for targeting purposes within in a single platform
  • Capability to run granular, transparent campaigns that can be optimized in real-time based on performance

The Advantages for Sellers

  • The decrease of wasted inventory by selling remnant impressions to non-direct clients through trading desks, DSPs and other exchanges
  • Delivering increased highly targeted impressions, increasing the value of inventory and ultimately performance for repeat business
  • Ability for CPMs and revenue to be driven higher through competition as buyers try to outbid each other for the impression

Performance is a key factor and will determine the success of the RTB model. As technology continues to improve and more data becomes available, it is important to make sure that the analytics based on this data are timely and accurate because it is this information that will be used by buyers to find their audience. As for sellers, the publishers that are able to provide those audiences and engage them will be successful in the RTB world. Those publishers that don’t perform will not.

As you can see, real-time bidding provides advantages to both the buyer and seller side of the digital advertising marketplace. Buyers have more control over their campaigns and access to targeting, optimization and cost control that is not available with the traditional CPM model. For sellers, it is an opportunity to increase revenue by making inventory available to buyers that would otherwise not have access to it.

So whether you are on the buyer or seller side, looking to increase your ROI or move your inventory, real-time bidding is an important step forward in digital marketing, and it is going to continue to be as the demand for RTB inventory increases.

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Lori Goldberg is the CEO of TRAFFIQ, digital media solutions provider. She is a veteran of the media industry with 18 years of client and agency experience, the past 12 focusing on digital. Most recently, she was a Client Partner overseeing Razorfish's largest client relationships. As a Client Partner, she guided teams of specialists in digital media, search, strategy, ecommerce, creative, website content creation, user experience and technology. Before joining Razorfish, Goldberg spent six years as a VP, Account & Media Director with Initiative Media/ID Media, where she co-launched FastBridge, its interactive media division.

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