Real-time bid advertising is a new technology that promises to change industry standard measures for selling display ads on websites. The norm for advertisers has long been buying impressions in bulk (on a cost-per-thousand basis) and in advance due to technological barriers that promoted static media buy systems. One negative consequence was that it was difficult to calculate the real cost of a single impression due to the fact that, lumped into a large pack, individual impressions had differing levels of relevance and quality for particular advertising goals.
Another drawback was that it made tracking and processing data about target groups harder, making decisions about where to buy advertising space and how to calculate return on investment a little imprecise. Instead of passively buying large chunks of target groups, real-time bid advertising makes it possible to buy single impressions that are a better match for your actual advertising goals. RTB is a potential game-changer in the industry as marketers are likely to be attracted to the possibility of paying only for truly valuable users, rather than wide categories that cannot guarantee consistency or top quality of impressions. In the end, as their campaigns unfold, they can respond with smaller, better-informed transactions that occur in real time. This agility means heightened efficiency and reduced costs for advertisers.
Media planners and buyers routinely bring up the issue of wanting to improve the effectiveness and ROI of their online display campaigns. The industry has high hopes for real-time bid advertising as a technology that can develop into a new paradigm.
Here are potential gains from RTB:
1. Cutting costs as less money is spent on poorly-targeted impressions that contribute very little to your campaign objectives. As buying full pre-arranged impression inventories stop being a standard, you no longer lose by having to pay for gap and quota fillers.
2. Performance is likely to come to the forefront as you can evaluate and specify parameters you really want from users who see your advertising. This is bound to be another move from pay for impression to pay for performance model.
3. Better information flows about what works for every impression you buy are set to improve your future campaign decisions. Because with real-time bid advertising you operate on a very detailed level of analysis, a single impression, your insights have to become more fine-grained.
4. Optimization does not have to stop at the level of media planning and buying decisions, even though having access to impression-level trends is a powerful analytical boost, but also on the level of creation and message customization.
There is a lot of creative motion in the industry and more and more major players in custom solutions for advertising venture into real-time bid advertising. Ad exchanges such as ContextWeb ADSDAQ and OpenX Market have already unveiled their real-time ad inventory systems. Major publisher yield optimizers, like PubMatic, AdMeld or RubiconProject, are in the business too. Ad networks are slower to adapt, but some companies, like AdBrite, have taken the step towards integrating their services with real-time bid advertising.