Real-time bidding is a type of automated or programmatic buying of advertising placements.
It is to digital advertising what high-frequency trading is to Wall Street. It involves computerized, algorithm-driven trading that allows for quick buying of ad impressions according to pre-set parameters. Twitter is the latest tech company to enter the RTB race with this month’s acquisition of MoPub, an ad exchange with a real-time bidding platform.
On the desktop, programmatic or automated buying of display ads has already made huge inroads. Its advocates say that it has led to a more transparent and efficient digital ad market. But it is in mobile where programmatic buying may make the most difference. That’s because smartphones are advertising platforms that we carry in our pockets, and with RTB that means marketers can reach us in real-time, and target potential customers according to location and context.
In a recent report from BI Intelligence on real time bidding (RTB), we explain what RTB is, analyse how it may help solve the mobile advertising CPM problem, detail its recent impact and successes on ad buyers and sellers, examine the potential obstacles to its widespread adoption, and look at how the holy grail of mobile advertising — simultaneous scale, controls and efficiencies — may be reached through its use.
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Here’s an overview of why RTB or real-time bidding could make the difference in mobile, digital advertising’s new frontier:
- It could help solve the CPM problem:The glut of ad inventory as global audiences rush into mobile has dragged on mobile display ad CPMs (CPMs refers to the cost per thousand impressions). That means publishers can’t monetise their mobile audiences effectively via ads. Advocates of programmatic — or automated buying and selling — say it can deliver the scale and efficiency needed to effectively match buyers and sellers and boost CPMs.
- Leveraging location data via real-time bidding (RTB): RTB is a style of programmatic buying in which digital advertising opportunities are auctioned off in real-time. The auctions take place in milliseconds as advertisers bid on the right to show you an ad immediately after you open an app or click to a new web page. On mobile, RTB could be extremely powerful because consumers take their devices everywhere — to the mall, the car dealership, Starbucks, etc. “You have a source of media that’s with someone constantly,” says Jamie Singer, director of client services at Everyscreen Media, a platform for mobile RTB that was recently acquired by Media6Degrees. “You’re working in real-time, and getting information based on location.”
- Helping to reach the holy grail of mobile advertising — controls and efficiencies: Believers in RTB and programmatic for mobile say they are making giant strides in perfecting their technologies, so they’ll have the ability to leverage consumer data on mobile and track users as they do on PCs (while still being sensitive to privacy concerns). That will include location, contextual, and demographic data layered on top of real-time ad requests.
- Some publishers already achieve higher CPMs with RTB than they do with traditional ad networks: As a result, RTB is seeing wider adoption across the mobile ad ecosystem, and positive momentum on both sides of the equation. The sell-side is providing more premium inventory, and larger publishers. And the buy-side is seeing more demand for RTB from advertisers and agencies. Of course, RTB and programmatic are contributing to hyper-efficient markets where ad prices tend to be low. The key is for RTB to bring scale to premium mobile ad marketplaces, bring in scale-focused brands, and lift all boats that way.
In full, the report:
- Explains what programmatic buying and real-time bidding (RTB) are, and how they work
- Analyses how RTB and programmatic may help solve the mobile advertising CPM problem in the long-term, but is a minefield for stakeholders in the short and medium-term
- Details its recent impact and successes
- Examines the potential obstacles to its widespread adoption
- Looks at how the holy grail of mobile advertising — controls and efficiencies — may be reached through its use