Transcript: Two dollars, going once…going twice…sold to the highest bidder! Hey there! You’ve likely guessed it, but in this video, we delve into the world of real-time bidding in advertising. So, what is real-time bidding?
Understanding the Mechanics of Real-Time Bidding?
Keep watching to uncover the details.
Real-Time Bidding Definition: Real-time bidding (RTB) is an automated digital auction process enabling advertisers to bid on ad space from publishers on a cost-per-thousand-impressions (CPM) basis.
Understanding Cost Per Thousand (CPM)?
CPM represents the cost you incur for one thousand individuals to view your advertisement. Similar to an auction, the highest bid from relevant ads generally secures the ad placement.
Exploring Real-Time Bidding in Marketing: The Process
The RTB process unfolds in milliseconds before a website even loads, imperceptible to the user. It is a component of the broader programmatic advertising landscape, involving three key platforms for ad purchasing:
These platforms collaborate to present ads to the user. Before diving into how these platforms work together for real-time bidding, let’s understand their individual roles.
What is a Demand-Side Platform?
A demand-side platform empowers advertisers to purchase ad space and manage their campaigns. It serves as a hub for advertisers seeking ad space. An example is Google Ads.
What is an Ad Exchange?
Positioned between the advertiser and the publisher, the ad exchange operates like a marketplace connecting vendors and buyers. Ads are bought and sold based on relevance and bid value. Google Ad Manager includes an ad exchange, previously known as DoubleClick Ad Exchange.
What is a Supply-Side Platform?
A supply-side platform is utilized by publishers or website owners to sell their ad space to advertisers. It facilitates the supply of ad space. Google Ad Manager also incorporates a supply-side platform, previously known as DoubleClick for Publishers.
The RTB process initiates with the user’s interaction.
When you click on a link to visit a website, real-time bidding commences. Once an ad is selected, the website loads, and you see the winning ad on your screen. This intricate process occurs rapidly.
Consider a scenario where you run an automotive business specializing in sports car parts. You aim to use real-time bidding to showcase your brand to individuals interested in purchasing new parts. You set your targeting preferences and budget. If someone in your target audience visits a racing blog with available ad space, and your ad has the winning bid, it will appear on that website, in front of someone interested in your offerings.
Real-time bidding allows for ultra-specific audience targeting, enhancing your business’s return on investment (ROI).
The cost of RTB varies based on other bids and the targeting parameters of your ad, such as keywords, location, demographics, and interests. The investment can range from $2,500 to over $15,000 per campaign, with no strict upper limit. Remember, RTB operates on a CPM basis, allowing bids as low as $1 or $2.
You have control over your budget with real-time bidding.
Here are the top benefits of real-time bidding:
Time-saving: RTB automates the ad campaign process, saving you valuable time once you’ve set your parameters.
Cost-efficient: Real-time bidding is cost-effective as you set your budget, as seen with Google’s programmatic advertising, which saw a 30% decrease in CPM.
Relevance assurance: Real-time bidding ensures your ad is relevant to the user, avoiding wasted spending on uninterested parties.
These are the fundamentals of real-time bidding. If you have further questions about real-time bidding, advertising, or its definition, WebFX is here to assist. Feel free to call us at 888-601-5359 or contact us online if you’re interested in initiating your campaign! If you enjoyed this video, explore more of our digital advertising content: What is Digital Advertising? Don’t forget to subscribe to our YouTube channel for a wealth of digital marketing insights. See you soon!
