What Is the RTB Meaning in Marketing?

What Is the RTB Meaning in Marketing?

If you’ve heard about the online advertising concept of real-time bidding (RTB), you likely have many questions about the RTB meaning. It can be a hard concept to grasp because it encompasses many different components.

These elements include:

  • Supply-side platform (SSP) 
  • Demand-side platform (DSP)
  • Ad exchange 
  • Ad network

Each of these functions within the broader context of the auction, both purchasing and selling ad inventory. Just because real-time bidding (RTB) can feel challenging to grasp, doesn’t mean you have the luxury of ignoring it. 

Don’t believe me? Then, consider this. Over the past handful of years, the sales share of RTB in advertising has tripled in China, the UK, and the US. What’s more, by 2025, RTB will represent a $29 billion share of the advertising market! 

Keep reading to find out more about RTB and how to incorporate it into your marketing strategy in 2020

Real-Time Bidding (RTB meaning) and Programmatic Advertising

Within the past three years, RTB’s share of advertising has expanded three times. That makes RTB a huge game-changer, but if you’re still struggling with what you need to know about RTB, no worries. Let’s break it down further.

RTB represents one aspect of programmatic advertising. Programmatic advertising takes the middleman out of advertising. In other words, it negates the need for agencies, clients, media companies, or publishers. 

It does the tough negotiating for you so that you can rest assured the right people are seeing your ads at the right time.

How is this achieved? In programmatic advertising, an algorithm handles the buying and selling of media. This process happens quickly and effortlessly because the algorithm is continually learning.

The algorithm also relies on a cloud-software platform to record these transactions. That way, you don’t have to worry about tons of paperwork and the human error that comes with it.

Because of this new technology, many companies are taking programmatic advertising in-house. That said, here are a few things to consider before making the shift. 

The Meaning of RTB 

Although no single definition for RTB currently exists, we can still spend some time further breaking down the concept. RTB speaks to the function of purchasing ads online through real-time bidding software. Here’s how it works.

Let’s say a user opens up a browser and goes to a targeted website. That website has an ad banner that will appear when the page loads. During that 100 milliseconds worth of loading time, a live online auction takes place.

This auction occurs between different advertisers who’d like to see their ad banner appear before the client. Based on the algorithm, the highest bid wins, and the banner loads and is visible to the user.

That’s real-time bidding in a nutshell. 

It’s essential to keep in mind that RTB is an interconnected ecosystem. It brings together many different working parts during the purchasing and ad distribution process. 

What are these various working parts? 

The Moving Parts of RTB And RTB Meaning

Before a marketer or advertiser can get in on the RTB game, they need to join a demand-side platform (DSP). This platform renders the ad inventory buying easier and simpler. It makes managing a larger advertising exchange platform a cinch.

Once the advertiser or marketer has joined a DSP, they can set up a real-time bidding ad campaign. 

What exactly does a DSP allow an advertiser or marketer to do? It optimizes their ad campaign in many different ways. These ways include:

  • Choosing the targeted audience they want to reach
  • Creating targeting profiles
  • Connecting to other major DSPs
  • Setting a budget framework
  • Prioritizing the publisher websites best fit for their specific campaign
  • Blacklisting specific ad inventories 
  • Setting a budget limit to be spent in a day
  • Creating custom parameters
  • Setting up PKIs

In return for all of these services, the marketer or advertiser pays a small fee to the DSP software provider. With all of these features in mind, let’s explore the supply-side platform (SSP) contribution to programmatic advertising and RTB.

The Supply-Side Platform Contribution

The supply-side platform (SSP) represents the correspondent of the DSP. The SSP manages the digital advertising inventory. It also connects it to the whole RTB process.

In other words, when a user goes to a publisher’s page, the SSP notifies the ad exchange. This message is a bid request expressed in code.

Within the code, there’s information about the user who has entered the page. There’s also data about the minimum price the publisher wishes to receive for ad placement.

Once the bid request reaches the ad exchange, all of the DSPs begin to process it.

If the bid request meets the target, budget, and other KPI requirements delineated by the DSP, then it bids on that specific ad through an RTB protocol. Along with this bid comes creative specifics for the ad and other associated parameters. 

Again, these communications are all embedded within code.

At this point, the SSP collects all of the DSP bids and analyzes them. Then, it selects the highest bid. Despite all of the actions that occur, the entire process happens within mere milliseconds. 

How Webpage Owners Contribute to RTB & The RTB meaning

To facilitate the entire process, a publisher must submit their webpage as a source for an advertisement to an SSP. They then use a special pixel code to implement the process.

This pixel code observes visitors’ behavior and provides received information to data providers for further analytical actions.

Although this can sound a little like cyberstalking, it’s important to remember that all of the data analyzed is anonymous. 

Publishers also have control when it comes to filtering out the ads (by each advertiser) that’ll appear on their page. They can also set a low rate for the ad space to define the minimum price they’ll accept for that location.

While advertisers and marketers use a DSP platform to communicate, publishers communicate through SSP platforms. 

Benefits that RTB Can Add to Your Marketing Strategy

Using RTB comes with countless benefits, but let’s highlight some of the most compelling ones. First of all, it works with any ad campaign. That means no restrictions on campaign size or budget.

You might assume you’ve got to be a massive company with a huge marketing budget in order to take advantage of RTB. This assumption, however, is wrong. Local business owners are using it to their advantage for a budget of $100.

RTB also offers fantastic exposure to a wide range of publishers. This exposure cuts down on the research time required for ad placement.

This point brings up a critical question. What would gaining access to a large variety of digital publishers, blogs, apps, websites, and their target audiences do for your company?

The minimization of research time and new access to both local and worldwide platforms, their audiences, and their ad prices, all represent game-changers. 

Besides all of these advantages, you can also rest assured you’ll get impressions for better prices. After all, RTB permits more efficient optimization of advertising and campaign objectives.

So you can set your ad impression objective along with your available budget. These capabilities ensure that you’ll find the right platforms that’ll yield your desired results.

RTB Increases Efficiency and Provides Added Value

Besides cutting research time and ensuring better prices for impressions, RTB can help with buying the right niche audience.

How? By analyzing the first and third-party data publishers’ platforms and then matching them with advertisers’ desired niche audiences.

Effective advertising involves reaching your relevant niche audience, making this another valuable RTB tool. Put another way, RTB allows for greater precision when it comes to advertising. 

It ensures that your messages get delivered to the right people, people who are interested in your services. People that are more likely to click on your link, purchase your product, or subscribe to your newsletter.

Because of this high level of precision, there are no wasted ad impressions. 

More Reasons to Include RTB in Your Next Marketing Strategy

Better still, these impressions are purchased one at a time. Perhaps, this factor remains the most amazing feature of RTB, offering high-level precision.

With RTB, you purchase just one, closely-analyzed impression according to pre-set parameters created by the advertiser. This precision renders advertising a science rather than a gamble. 

RTB also allows you to consistently and continuously optimize your keywords. That way, you can experiment and find the perfect setup for your campaign goals.

The result? Saved money and time as a marketer or advertiser.

Of course, the benefits don’t stop there. With RTB, you can analyze data in real-time while running campaigns. That way, you can make adjustments throughout the process rather than having to see a failing campaign through to the end.

You can tinker with your campaign as needed, learning as you go, and improving your results along the way.

Last but not least, RTB can run on multiple campaigns simultaneously. You don’t have to worry about any interference while multi-tasking in this new way.

The Cost of RTBs

At this point, you may be wondering how much all of this costs? The final price tag for an RTB strategy depends on the scale of your campaign and the websites that you’d like your ads to display on. 

Remember, too, that the advertiser or marketer sets the maximum price per bid and the maximum budget for the ad campaign. 

How are these costs calculated? Through one of four different ways:

  • Cost of 1000 views (CPM)
  • Cost per click (CPC)
  • Cost per lead (CPL)
  • Cost per action (CPA)

Let’s explore each of these categories a bit further.

Cost of 1000 views (CPM) means that you’ll pay every time your ad receives one thousand views or clicks.

As for cost per click (CPC) or pay-per-click (PPC) ads, these refer to an online advertising model in which you pay a publisher when someone clicks on your ad.

Similarly, you pay for cost per lead (CPC) ads every time a new contact or potential buyer fills out a sign-up form. As for cost per action (CPA) ads, these are also referred to as cost per conversion.

In this case, the advertiser pays for a specific action. This action could be anything from a click to a sale of form sign-up. 

What Are You Waiting For?

Yes, RTB remains a new feature on the digital ad market, but it’s rapidly both changing and leveling the playing field. That means there’s no better time than the present to get in on the action. 

The whole RTB mechanism does a fantastic job of connecting advertisers, publishers, SSPs, DSPs, and data providers. While this process appears complicated on the surface, it relies on software that renders the system both easy and speedy.

In the time it takes to load a page, you reap the benefits of this software to create ads that are hyper-focused on your niche market. Since you only pay for one impression at a time, you have a high level of control over your budget. 

If you’re ready to get the most out of your digital advertising budget, then it’s time to get in on the ground floor of the RTB revolution. 

A Final Word on What RTB Can Do for Your Business 

Now that we’ve covered the basics when it comes to the meaning of RTB, you’ve got a better concept of how it can help your company reach a much wider audience.

It also lets you increase brand awareness while gathering valuable information about your audience.

You optimize your campaign using real-time analysis, and it’s compatible with multiple devices. No wonder RTB represents such a fast-growing segment of the advertising and marketing world. 

RTB provides countless benefits for all parties involved. It increases publisher revenues through ad inventories. Advertisers can reach niche audiences, and audience members get to see ads relevant to their unique interests.

In other words, it’s a win-win for everyone involved. Ready to learn more about the meaning of RTB and what it can do for your company’s marketing strategy? Browse our blog for everything you need to know to ramp up your advertising.

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