TMK's The Fridge

Online advertising is changing and Real Time Bidding (RTB) is quickly emerging as a highly effective advertising method. In RTB, advertisers bid to have their ads shown to web users. This means that in the split seconds it takes for you load a web page, a digital auction occurs, awarding the ad space to the highest bidder.  The growth of RTB can be attributed to two main factors: market acceptance and data intensity.

What Makes Real Time Bidding Appealing to Advertisers?

With RTB, the network middleman is removed. Advertisers and publishers directly connect across online media exchanges in a free market for the online display world. In this market, ad prices are determined by demand and supply. Moreover, marketers can bid on individual impressions based on a number of factors including website, demographics, location, and more, allowing them to bid highest on impressions that offer the most value. This transparency ensures that the right individuals will see the ad, and the result is pricing that benefits not only advertisers, but publishers as well.

Premiums publishers increasingly understand that marketing their inventory over exchanges does not necessarily mean losing revenues. While CPM for some ranges of publisher inventory may go down, this is usually more than compensated by the decrease in unsold ad space.

The Future of RTB in Mobile

This automated buying of display ads has seen remarkable success on desktop, with industry experts saying that desktop RTB has lead to a more efficient and transparent digital ad market. RTB has just as much potential in mobile, if not more. RTB campaigns can reach people based on context and location, wherever they carry their smartphone.  Ads can also be delivered as soon as the user takes an action on the mobile web or an app.

Summary

Publishers stand to get a better ROI from RTB advertising. For example, premium-level inventory will receive maximum monetization value due to higher-volume demand, leading to higher overall revenue for the publishers, better ads and better user experience. Apart from this, niche inventory will have greater access to higher liquidity of offers in the marketplace. Industry players also point to a greater and deeper understanding of which inventory assets generate what levels of monetization thanks to greater inventory transparency.

Buyers also stand to benefit from RTB. As more players enter the industry, increased activity will lead to improved revenues. For example, with multiple bids, buyers have a better chance of realizing their budgets and reducing lost opportunity scenarios. The economies of scale from increased bidding will drive access to more and better premium inventory.