Advantages and Disadvantages of Real-Time Bidding

The Advantages and Disadvantages of Real-Time Bidding for Publishers

Despite 2020 proving to be a turbulent year for online advertising, companies still spent over $330 billion up to the end of Q2. And while we await statistical confirmation, digital advertising will probably grow despite global difficulties. 

Florida SEO
Florida SEO

Does that sound great to you? We thought it might. As a publisher, you want to find new ways to monetize your website. 

But there’s one problem – you don’t know where to start or what will work best for you. 

Because you have so many kinds of advertising to choose from, you’re overwhelmed. 

Sound familiar? Fear not, because we’re going to help you decide. Keep reading to find out the advantages of real-time bidding for publishers, as well as the possible drawbacks. 

What Is Real-Time Bidding And How Does It Work For Publishers? 

Real-time bidding (RTB) involves buying and selling display ads based on impressions. RTB is already big business, with this form of advertising expected to be worth over $27 billion by 2024

Usually, there are two parties. The first is the advertiser (i.e., the person who will buy ads from you). 

The second is the publisher. This is the website ads will appear on, which in this case is you. 

Advertisers will pay for impressions you receive on the publisher’s site. 

When a publisher is interested in RTB, they will submit a bid to the advertiser. Their offer will then go against the others sent.

The ad seller decides which potential buyers and industries cannot bid on their ad spot. They also choose where the ad goes on their website, as well as its geo-location. 

Whoever is selling an advertising spot will also decide if buyers access the site name or cookies. Advertisers will use third-party platforms to automate their online ad buying. 

Sellers will also sometimes use software to help them to manage their advertising spot sales with greater efficiency. 

If a bid is successful, advertisers will be given an ad tag and pay based on how many users see the ad. The advertiser’s ads will go live on the publisher’s website almost instantly.

The entire process takes little to no time, meaning they can do more with your campaigns in a shorter timescale. 

RTB differs from more traditional forms of advertising. Advertisers do not pay in bulk for spaces, even if nobody sees their content.

Instead, brands are typically charged on a cost-per-mille (CPM) basis for every 1,000 impressions. 

Is RTB Different From Programmatic Buying? 

RTB and programmatic buying have some similarities. However, they are by no means the same thing. 

Guaranteed direct buying is an essential part of programmatic buying. This is not the case for RTB. RTB also involves public exchanges when it comes to ad purchasing, but programmatic buying is often private. 

In essence, RTB isn’t doo different from when you buy stocks in financial trading. The only real difference is that the publisher decides how much ad spots will cost, rather than the market alone. 

The similarities between RTB and programmatic buying is that in both cases, the buyer and seller use technology to automate and close deals. Campaigns allow advertisers to reach their audience at times when those users are online. 

Should I Offer Ad Spaces On Desktop Or Mobile? 

This depends on where most of your traffic comes from. In the future, this will probably be mobile. 

IAB research found that in 2019, US brands made 15.9% more ($124.6 billion in total) from online advertising compared to 2018. Before the pandemic, early 2020 statistics suggested that the trend up to that point was still upwards. 

Much of the above revenue, however, came from a rise in mobile ads. 

How important is mobile advertising to your publishing brand? Each day, the average American spent over three hours on their phone in 2020.

Since the population became more digitally-connected (out of necessity), advertisers also had (and continue to have) a more significant opportunity to get in front of more eyeballs. 

Beyond higher mobile use, people are also more engaging on their smartphones. Six in 10 users are happy to exchange personal information if they get better-suited deals. 

Meanwhile, separate research from the above article reveals that almost half of customers are happy to be sent personalized mobile offers.  

Regardless of where you offer ad spaces, you need to make sure that you communicate the necessary banner sizes to advertisers. 

What Are The Advantages Of Real-Time Bidding For Publishers? 

For publishers, RTB has a number of positives compared to other forms of advertising. You have more control over which ads appear on your website, and the benefits for advertisers could lead to more ad revenue for you too.

So you can decide whether or not this is the best form of advertising for you to offer, the most important benefits of RTB for your brand are listed below.

Better ad spend efficiency: With RTB, advertisers can concentrate more of their money into specific channels. If you are trying this kind of advertising for the first time, the risk can also be lower because they only pay for what their audience sees. 

Another way that RTB helps advertisers to be efficient with your ad spend is through its speed. The whole bidding and advertising processes normally take less than a second. As a result, they can decide what does and doesn’t work without wasting too much time. 

As a publisher, this is important for you because you may be able to attract more advertisers. If brands know they have a way to be more cost-effective, they may be more willing to put their faith in you. As a result, you will find fewer empty ad spots on your site. Thanks to this, ad revenue will keep coming in. 

Better-targeted campaign results: Because RTB allows advertisers to target a narrower group of users, they will attract users more likely to engage with their brand. The whole point of RTB is for the seller to earn more from higher impressions, and for you to earn more through higher-quality customers.

As a publisher, RTB will allow you to make sure that you are displaying site ads relevant to your audience. When they click through, you benefit from getting more of a share from each successful campaign. 

Since you’re providing extra value to your audience, you might also find that repeat visitors increase. With greater customer loyalty, you can start to sell some of your own products and services to them too. That, in turn, may lead to additional long-term revenue streams. 

Easy customization: As the publisher, you have full control over who can and cannot advertise on your website. You set the brief and have the power to blacklist certain websites you don’t want to work with. Moreover, you can make sure that bidding is only possible for brands in industries relevant to your site’s niche and audience’s preferences. 

By using a supply-side platform (SSP), you can tweak how much you want to charge for ad spots based on supply and demand. You can also make sure that your blacklists are more narrowed down, meaning that you only work with trusted advertisers. 

But That’s Not All…  

Besides the above three main benefits, choosing to offer RTB advertising spots comes with other niceties. You can find a few extra positives below. 

Better audience insights: Real-time advertising equals real-time data. As a publisher, you have the power to see what your audience is engaging with on your website. 

Because of this, you can make changes to who is and isn’t allowed to advertise on your website – as and when necessary. But as a personal benefit, you will also get a better understanding of what people want to see from you on other parts of your website. 

Better user experience: Because you’ll know more about what users want to see from you, you will be able to better optimize your website’s current offerings for them. This includes creating blog content they want to see, as well as being able to help them on their customer journey. 

All of these will help to lower bounce rates and put more valuable content out, both on your site and social media. You will also be able to increase the number of repeat visitors.

Improving your user experience will also help to improve your organic SEO rankings, making you even more visible in front of the right audience online. 

What Are The Disadvantages Of RTB? 

While there are many benefits of RTB for brands, you also need to consider the disadvantages. Some of the key ones are below. 

Data compliance: As a publisher, you need to comply with data regulations in the market you serve. For example, EU-facing sites need to consider GDPR. This can make it hard to get full user insights and also tricky for advertisers to ensure their ads adhere to regulations.

RTB involves user data, so you need to be careful about this. Make sure that you are compliant at all times and understand the rules for your territories.

The risk of harm to your industry reputation: Because RTB is automated, you must consider the harm that unwanted advertisers could do to your brand. Their actions could damage your reputation and stop others from wanting to work with you in the future. 

Another risk of working with advertisers is the possibility of fraud and misleading information. To reduce the risk of poor advertising practices, you should invest in software that can detect and block harmful advertisers and content types. 

How To Maximize RTB

Be transparent with advertisers: Before you sell advertising spots on your site, it’s vital that you are honest with potential buyers. You should be clear about your audience and their preferences, as well as the type of content you normally promote. 

You can also help buyers by pointing out what times of day are the most popular, and charging accordingly. This will help you to earn more from their ad revenue, while they will benefit from having more eyeballs on their brand. 

Do your prior research: You should also do research on the types of advertisers you want to allow on your website. Search through your industry for brands with a poor reputation, and be sure to shut out any industries that are not relevant to your website. 

It also pays to do research on your audience. You will know better than anyone else what they do and do not like. Putting more effort into due diligence will make sure that advertising on your site benefits everyone, and not just your front pockets. 

Use RTB to Bring In More Revenue For Your Publishing Company 

For publishers, real-time bidding allows for selling better-targeted advertising spots. You will attract more business because advertisers can spend their ad money more efficiently.

When offering RTB, stay fully transparent with the people buying from you. Make it clear what you offer and the types of web traffic they can expect from advertising with you.

You will become a trusted publisher and regularly fill up your advertising spots by carrying out all of the above. Both of these will help you generate more ad revenue over the long run and improve your organic web offerings.

Now you know about both the benefits and disadvantages of real-time bidding for publishers, why not start making the steps to bringing in more ad revenue? At Go Florida SEO, we specialize in specific ad targeting and help publishers target more specific traffic. Get in touch to find out more.

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