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RTB: What is it and why is it useful?

RTB: What is it and why is it useful? Volker Ballueder
This article will shed some light on what real time bidding (RTB) is all about from a marketing point of view. Don't worry, no technical insights, just a general overview on why it is useful to the advertiser and agencies running online display media campaigns. Everyone seems to be talking about it, but how does it help you?

From a publisher point of view, you make your impressions more valuable to advertisers, hence increasing the bid price and ultimately your ROI. From an agency or advertiser point of view, you have more control and transparency of where your ad runs, and how much each single impression is worth to you, ultimately running your campaigns more effectively. Again, we are looking to increase the ROI.

Hence, the main question is not whether RTB is important to your media planning and buying, but how much 'non RTB inventory' you should add to it. RTB will be the main trading 'currency' for online ad impressions moving forward. That is because of exactly the same reasons above: transparency, efficiency and control. The amounts of ad impressions in the U.K. that are bought in real time are currently about 10 per cent and increasing. Google VP of product management, Neal Mohan, says that 'within five years, 50 per cent of targeted ads will be bought using real-time bidding technology'. Why? Because more and more DSPs (demand side platforms) and SSPs (supply side platforms) will enable real time bidding, making inventory and impressions available for real time auction. It makes display advertising almost as efficient as search marketing. And, if you followed the news of our part of the industry lately, Google just bought the biggest and most RTB driven SSP: Admeld.

Let's have another view on things: we are living in a data driven market, or are we? Data, which is another way of saying 'cookie information about a user, e.g. behaviour', is the new buzzword in the industry. However, data providers so far haven't been able to collect and deliver quality data. And, technologies haven't been able to use data effectively in a buying environment. With the progression of RTB it becomes easier to identify and target a specific user across RTB platforms. However, the data quality and price still don't match the extra ROI you might get from the campaign by adding that data. As an example, if you pay 20 per cent extra on top of your CPM for the data, you don't necessarily get 20 per cent extra ROI from your campaign. That will surely change over time, as data becomes more granular and the more data is qualified. The impact of those highly targeted campaigns might improve media buying once again -- and the market is moving fast -- if there wasn't the European cookie legislation... I don't want to drift off the point, but it would be a blast to our industry if cookie data were banned, as it serves as a basis for remarketing, frequency capping, tracking, and behavioural data.

What RTB effectively means to your campaign is that it results in less wastage of bought impressions, full control where your ads appear, bidding the true (associated) value for any single impression, full transparency and optimisation of an advertising campaign as it happens.

So the reason why advertisers should look for RTB enabled buying models or service providers is the additional reach, transparency, efficiency and the greater ROI for your budget. And, in theory, you can have a different creative for each single impression, too.

To drill on the point of increased ROI, this is actually the reason why you should run your display campaign with more than one exchange buy on your media plan (or a service provider that uses several RTB engines for that matter): you gain performance from it. Different real time bidders, different technologies and algorithms, access inventory differently and optimise it differently. By using more than one technology to access the available real time inventory you increase your reach. If you think of a real time bidder as a listening device for RTB impressions, every bidder listens to the available impressions differently (according to algorithm and a few other performance indicators), hence having more than one technology to access the billion of impressions out there, you increase your reach rather than cannibalise it.

On that note, if you have a big enough cookie pool and use various exchange buys (DSP, DEM, RTB engines) on the plan, you should not see an increase in your bid price, as there is almost no limit to the amount of available impressions.

Now I hope this summarises at least why RTB is here to stay and why the amount of RTB impressions bought across exchanges will increase in time to come. And, you should have understood the advantages of RTB and why it will help your campaign improve its performance, its visibility and efficiency. The transparency and increased performance are the key points to take away, as you will see a better ROI from your advertising spend and hence a better performance. Whether this is for direct response or branding campaigns.

Overall, the key is not to only have one technology to work across the RTB platforms but the team that is capable of using the technology and utilise it. If you think of an analogy like Formula 1: it is not only the car that matters but also the driver behind the wheel and the support team that steers the success.

Volker Ballueder is the UK country manager for Mexad

Volker is an expert in Digital Marketing, particularly in Programmatic Marketing. He currently works for Civolution. He has managed UK and international sales, services and account management teams. Volker’s early career includes search...

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