What Is RTB In Marketing? Exploring Real-Time Bidding Dynamics

The internet has changed many things, including the marketing mix. Promotion is no longer limited to brick-and-mortar stores. Nowadays, every screen is a space for adverts, mainly driven by RTB. So, what is RTB in marketing?   Real-time bidding, or RTB, is a critical element that has revolutionized advertising over the internet. As indicated in its name,…

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what is rtb in marketing

what is rtb in marketing

The internet has changed many things, including the marketing mix. Promotion is no longer limited to brick-and-mortar stores. Nowadays, every screen is a space for adverts, mainly driven by RTB. So, what is RTB in marketing?  

Real-time bidding, or RTB, is a critical element that has revolutionized advertising over the internet. As indicated in its name, the auction for ad inventory is instantaneous. Here, advertisers can buy space for advertising themselves in the media on a per-impression basis. 

Moreover, RTB is a significant departure from the static model. Earlier, advertising space was auctioned for a group of impressions. Nonetheless, it is becoming the norm in a world of instant mouse clicks. This is particularly true for targeting a niche audience through grassroots marketing. If you wish to keep up with RTB’s times and fundamentals, continue to read! 

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How It Works

Having looked at what are RTBs in marketing, let’s now answer the ‘How.’ Real-time bidding, or RTB, takes place in a span of milliseconds. It is three times faster than the time you take to blink! Below is an outline of the solved process – with a straightforward but complete explanation of each stage.

Process Involved in RTB Working 

The RTB process begins as soon as a user visits the website. 

  1. User Visit: The cycle begins when a user lands on a website with ad space available. The website in question can be a social media platform, a blogging platform, or any other website willing to host ads. user visits
  2. Ad Request: While the webpage loads on the user’s end, a request is sent to the ad exchange or a supply-side platform. This request is to fill an ad slot marked as available on the web page. ad exchange ssp and dsp
  3. Auction Initiation  Consequently, the publisher’s Supply-Side Platform or the ad exchange initiates the auction process, receiving multiple bids from advertisers. receiving lots of bid requests
  4. Advertiser’s Bid: Interested advertisers evaluate the ad space and submit bids during this stage. They do this through their Demand-Side Platforms (DSP). Target audience and campaign goals determine the bid rate.demand side platform
  5. Auction Determination: The Ad Exchange processes the bids and determines the winning ad, which is, in most cases, based on the highest bid.winning ad
  6. Ad Display: Lastly, the winning ad is instantly displayed to the user on the website. This happens within seconds of the announcement of the winning bid. ad display

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Supply-side Platform 

Supply-side platforms (SSPs) are pivotal in the advertising ecosystem, serving as the central hub where publishers manage their advertising space.

SSPs establish connections with various ad exchanges, and their primary function is to ensure ad space availability for auctions.

Demand-Side Platform 

On the other side of the spectrum, Demand-Side Platforms (DSPs) empower advertisers by enabling them to bid on and acquire ad space in real-time.

DSPs make strategic decisions using sophisticated algorithms to process data, ensuring that the right ad is presented to the right audience.

Ad Exchange 

At the core of real-time bidding, the virtual marketplaces where advertisers and publishers converge are known as ‘ad exchanges.

These platforms facilitate real-time auctioning, ensuring the seamless interaction between demand and supply. Ad exchanges must maintain fairness and efficiency in transactions.

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Importance of RTB in Marketing

Even given that the digital environment is constantly shifting, you must know what is an RTB in marketing and how it impacts those involved in the advertising process – both the advertiser and the publisher. 

For Advertisers

Any individual or an organization that, through the use of media, promotes a brand, a product, or a service to the target consumer group is an advertiser. Knowing what is RTB in marketing or Real-Time Bidding is important for advertisers for the following reasons:

marketing for advertisers

  • Targeted Advertising RTB allows advertisers to precisely target the audiences to whom the advertisements must be shown. Driven by user data, this boosts the relevance of the ads to its viewers, thereby improving conversion rates. Not only consumers, you can also focus your advertising on targeting other businesses
  • Cost Efficiency  As an advertiser, you want to ensure that every dime you spend counts. With real-time bidding, advertisers can optimize their spending, providing the price they pay for the ad space aligns with the objectives of their campaign. 
  • Performance Display: The bidding and the marketing campaign’s performance are shown quickly. A minute-to-minute look at how the ads are doing helps advertisers gauge whether their marketing concept works and tailor the next ad set for better results.

In essence, understanding RTB empowers advertisers to refine their strategies, enhance precision, and maximize the efficiency of their advertising budget.

For Publishers

Publishers are owners of ad space, also known as ad inventory. On the digital front, publishers own apps and websites on which ads can be featured. 

If you’re a publisher, here’s a look at how RTB benefits you. 

marketing for publishers

  • Maximized Revenue: As a publisher, you want to earn the most out of the space you set aside for the advertiser. RTB allows you to do just that! Publishers can, in seconds, sell their ad space to the highest bidder, thus maximizing their potential revenue. 
  • Dynamic Pricing: The worry over whether the pricing will bring profits or not is a thing of the past, thanks to RTB. Now, publishers can dynamically adjust the pricing of their ad space based on the advertisers’ demand, which they can view in real time.
  • Increased Fill Rates: A publisher’s goal is to earn higher fill rates, which ensures the ad space is sold to its total capacity. RTB reduces unsold impressions by opening up the doors to multiple buyers who compete with each other or ad space. 

To recollect what is RTB in marketing and gain a solid understanding, let us use an example as illustrated below;

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RTB Example 

To recollect what is RTB in business and gain a solid understanding, let us use an example as illustrated below; 

real time bidding example

You are a sports enthusiast and want to catch up on the analysis of a match you missed last night. For this, you visit a website carrying sports news. When the page loads, an ad request is sent to the ad exchange from the advertiser’s demand-side platform. 

The publisher, in this case, the sports news website, initiates the bidding process after receiving a notification from the ad exchange. Let us take the bids to be as follows: 

Advertiser A bids $2, targeting basketball enthusiasts,

Advertise er B bids $3, targeting baseball enthusiasts,

Advertiser C bids $5, targeting soccer enthusiasts. 

Since Advertiser C is the highest bid, their ad is selected by the publisher for display on their website. When your computer fully loads the sports news page, it quickly displays a soccer-related advertisement on your screen.

Being a soccer enthusiast, you are likely to interact with the ad. If you still need to, you will at least remember the brand’s name and what it offers. This works wonderfully for the advertiser since he has your attention without furnishing the physical marketing evidence

Top RTB Platforms for Marketing

Now that you are clear about what is RTB in marketing, how it works, and its importance, let us know the top platforms for real-time bidding in marketing. dsp

Whether you already are part of this system or are trying it out for the first time, you may want to keep an eye out for these names; 

  • Google Ad Manager: First and foremost, this tech giant’s ad exchange platform allows advertisers to bid for ad space across multiple websites in image and video formats. Additionally, it provides a vast reach for your ad campaigns.
  • Xandr: Previously known as AppNexus, Xandr is now owned by Microsoft. Notably, it is famous for fee transparency. ‘Community,’ Xandr’s video marketplace, hosts a variety of consumer media brands and is a lucrative option to explore. Moreover, it stands out for its commitment to transparency and accountability.
  • OpenX: As an independent supply-side advertising exchange, OpenX is popular among mobile and OTT apps to host advertisements in all formats. The brand promises addressability, transparency, and sustainability. Furthermore, it ensures a reliable platform for advertisers seeking diverse advertising opportunities.

See also: What is Lead Generation in Digital Marketing?

How much will RTB Cost

After learning what does RTB mean in marketing, you shouldn’t know how much it costs. Several factors play a role in deciding the cost of RTB. A few of them include how competitive the market is, the degree of targeting, and the available space for advertising. 

real time bidding

According to market studies, a campaign in RTB can cost you anywhere from $20,000 to $100,000. To get the most bang for your buck, as an advertiser, you should be strategic in bidding and clear on what is RTB in marketing. 

FAQ 

What is RTB in marketing?

RTB in marketing refers to buying and selling digital advertising space in seconds.

What does RTB stand for?

RTB stands for Real-Time Bidding.

What is the RTB strategy?

RTB involves marketers buying ads per-impression basis in real-time for precise audience targeting.

What is RTB in trading?

RTB or real-time bidding is the ad space bought in real-time through media inventory auction platforms.

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Conclusion

To summarize the question ‘What is RTB in marketing?’, it is an advanced mechanism of auctioning and buying ad space in digital advertising and takes place in a fraction of a second. First and foremost, you should explore the above dynamic process to recap RTB marketing’s meaning. Moreover, understanding the intricacies of real-time bidding is crucial for marketers.

In addition, delving into the rapid-paced auction system unveils the complexity of the RTB landscape. Furthermore, examining how advertisers bid for impressions and compete in real-time auctions provides valuable insights. Lastly, grasping the instantaneous nature of RTB highlights its efficiency in securing ad placements.

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