What Is RTB Marketing and How It Simplifies Media-Trading?
RTB marketing is getting more and more attention in the recent decade, as it underpins many methods and solutions currently used in the online advertising industry. By 2021 RTB display ad spending is estimated to surpass $13 billion in the US only. This number is steadily growing throughout the last 7 years and the trend is likely to continue. Which is why in this article we are going to examine the meaning of this abbreviation marketing teams are paying billions for.
So what does RTB mean in marketing? How does it work? And what are its benefits for publishers and advertisers? Read on to find out.
What is RTB in marketing?
So what is RTB in marketing? Perhaps the best way to answer this question is to start with the RTB definition. Marketing via online channels requires lots of negotiations between advertisers and publishers which could take days in the dawn of digital marketing. Nowadays, most of the process is simplified and automated with the help of programmatic advertising solutions like RTB.
RTB marketing is an abbreviation that stands for marketing via real-time bidding auctions. It usually includes a huge set of techniques and solutions, each serving their part in the negotiations. During these auctions, publishers get an opportunity to sell their digital inventory, while marketers can launch their ad campaigns in a faster and more efficient way.
With the help of programmatic and RTB systems, marketing online became much simpler and more effective. This impact is specifically notable if one takes into account that the negotiation is completed while the web page is loading, just within milliseconds. Such optimization is achieved by utilizing advanced software that facilitates different steps of the process, like for instance a demand-side platform, an ad exchange, or various data management tools.
How Does RTB marketing Work?
To get a full understanding of what does RTB mean in marketing let us first examine the mechanisms that lie at the core of this process. Depending on the chosen advertising channels marketing strategies may vary from business to business, but the general scheme remains the same. Media-trading through real time bidding can be described in four simple steps:
- Step 1. The publisher offers their digital inventory for sale on their supply-side platform, ad network, or online advertising platform.
- Step 2. When the user enters a web page with the publisher’s ad placement, a request is sent to the ad exchange and the advertisers can bid on the inventory.
- Step 3. While the page is loading, advertisers bid on the impressions (usually with the help of the demand-side platform) until the highest bidder wins the auction.
- Step 4. Ad creative of the winning bidder is then displayed to the user. The whole process is in real time and takes less than a second; hence, RTB meaning — real-time bidding.
Both advertisers and publishers can control all the necessary parameters, like prioritizing specific inventory or setting a minimum price. Such a model automates a significant part of marketers’ and publishers’ tasks, shifting their attention to more strategic and sophisticated actions.
What is the difference between RTB and programmatic?
Although real-time bidding is not a new marketing term, there is still some confusion between RTB and programmatic. The difference, however, is quite simple:
Programmatic advertising is a broader marketing term — it includes most of digital media trading that is performed with automated platforms. This can be desktop and mobile advertising, as well as other formats like CTV or VR/AR. There are also programmatic options for publishers to offer their ad placements for a fixed price or in advance.
RTB meaning includes a set of technologies used in programmatic advertising characterized by trading inventory on auctions in contrast to other programmatic solutions that are focused on direct or guaranteed deals.
Why to use RTB?
Real-time bidding has greatly changed the world of digital advertising significantly simplifying and enhancing manual time-consuming tasks. Today’s advertiser only needs to sign up at the demand-side platform (DSP) and set up their campaign preferences to start bidding on a vast pool of impressions. Such an approach not only saves lots of time and effort but also offers a list of notable benefits that can drive business to a brand new level. Once advertisers start using a DSP they also get the following opportunities:
In a traditional version of media-trading, marketers had to reach each publisher or inventory directly and negotiate all the details. Things like ad prices or a number of impressions had to be discussed beforehand which took a significant amount of time. With the help of real-time bidding this process became automated; thus, allowing advertisers to focus more on things like understanding their audience and building a comprehensive strategy.
Relevant ad placements.
Using a demand-side platform or another platform for RTB buying also opens an opportunity to be more precise about your ad placements. One can choose the most relevant inventory or blacklist suppliers that didn’t work well for your campaigns. Such prioritization can drastically improve your budget by cutting out irrelevant impressions.
Apart from a more fine-tuned inventory choice, RTB marketing can bring your understanding of clients to a brand new level. With the help of RTB, one can get to know their audience as well as learn their interests, needs, and preferences. This way advertisers can send their message to the precise people interested and in the right circumstances to get their attention.
As a result of the aforementioned opportunities provided by RTB, businesses get the exact ad placements and tools they need to reach their specific audiences. Time and money saved on more efficient media-trading can also be redirected and play a decisive role in future campaigns. Eventually, utilizing these benefits inevitably leads to better campaign performance and increased ROI.
Another important advantage presented by the RTB is much greater flexibility compared to the traditional media-buying model where most campaign settings are pre-defined during the negotiations. By utilizing RTB solutions marketers can adjust their budgets on-the-go and fine-tune their campaigns based on audience data and their performance. They can also customize how many ad impressions they need, what is the ads daily frequency and other factors — all of this in real time.
This list of potential benefits can go on and on, but the main idea is that real-time bidding can be a game-changer for your campaign performance by giving you more options for customization or by freeing up some of your resources. Either way, the results usually include increased revenues and reaching your business goals.
How many types of RTB marketing are there?
It is now time to get more practical and dive into variations of RTB, meaning the most popular business models of interaction between advertisers and publishers. We will also investigate their upsides and downsides for reaching specific business objectives. There will be a couple of abbreviations to memorize, but once you get an understanding of these media-trading concepts, the world of RTB becomes much easier to comprehend.
CPM stands for cost-per-mille and is a term derived from Latin where mille means thousand. In practice, this implies that the advertiser is paying a fixed price for every 1000 impressions. This way your marketing budget is defined by the amount of traffic coming to the page with your ad. This is a specifically great option for publishers, as such a business model allows them to predict their incomes more accurately and not to worry about ads’ performance. It is a perfect strategy for brand awareness or other campaigns aimed at reaching wider audiences and spreading important messages.
CPC means cost-per-click, so every time when a user clicks on an ad they encounter, the publisher gets paid. This business model is more results-oriented because here the final budgeting is defined by the campaigns’ performance. It works especially great when you already know your audience and want to drive traffic to your landing page. Eventually, everything is decided by users’ engagement which makes the final price somewhat more unpredictable but allows advertisers to pay only for reaching a specific goal.
CPA is a broader term that can include many different business objectives, as it is short for cost-per-acquisition. This means that the advertiser is paying for every acquired lead or client which is defined by sales or by other specific action depending on the industry. For instance, **CPL **or cost-per-lead is one version of CPA where advertisers are paying for each lead they get like potential clients’ email or another form of initial communication with the brand. This strategy works best when you want to boost your sales by getting a precise reaction in response to your ads.
There are also other business models that are usually used for more specific cases, so their usage is not so wide-spread compared to the aforementioned options. These are, however, the three most important types of RTB that you may encounter, each having its advantages for a specific task.
RTB Advantages For Publishers
The technology of real-time bidding impacts not only the demand side and the industry in general but also simplifies many tasks of the digital publisher. Similar to the advertisers, publishers get an opportunity to sky-rocket their incomes with the help of optimization and other opportunities provided by the RTB. All they have to do is sign up to the supply-side platform (SSP), add their ad placements, and set up their preferences. The advantages provided by an SSP include: — Saved time and effort. Just like with advertisers and the DSP, by using the supply-side platforms publishers can save lots of time on negotiations. Thanks to RTB, relevant ad placements are matched with interested buyers in a matter of seconds, so both sides can enjoy higher efficiency throughout the process of searching partners and discussing the terms.
- A large pool of the demand partners. Lots of businesses from all over the world are using RTB to promote their products and services. They have different niches, objectives, and budgets, and the number of such advertisers is constantly growing. Which is why utilizing SSP creates a perfect opportunity for publishers who want to increase their fill rates or to scale up their demand partners list.
- Control over inventory. Most RTB platforms enable publishers to sell their digital assets on their terms. This means that one can set specific parameters regarding partners they want to work with, choose an appropriate business model, and set price floors — minimum prices for their placements. Such an approach can greatly help with aligning financial objectives with the exact strategies they perform.
- Effective optimization. Real-time bidding is also a great tool for strategic optimization, and perhaps the greatest advantage here is that you can do it literally in real time. Once you’ve offered your inventory for sale, SSPs start to gather and provide data regarding its performance. By changing settings in accordance with your business goals one can easily optimize their media-selling process; thus, increasing their revenues.
- Valuable data. In our changing world, the value of data is gaining more and more attention. Indeed, the more you know about your audience, the more relevant content and offers you can provide. As a result, you can enjoy increased traffic and engagement from interested users. Such data is also especially valuable for the advertisers, as they can draw decisive insights for the success of future campaigns. Therefore, you can enjoy your digital channels’ growth and get additional value from sharing.
Getting these benefits in practice is quite an easy task for almost any publisher with an appropriate media kit. With real-time bidding one can sell desktop web inventory, as well as mobile web and mobile app traffic, leaving lots of space for creativity and experiments.
Choosing cost-effective solutions backed by advanced technologies can help you refine your media-trading strategy and get your business to a brand new level in a fast and efficient manner.
Hesitant about which software to choose? Contact our team to find the best solutions for your business goals.
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