Demand side platforms or also known as DSPs are changing the marketing game forever and the same can be said for real time bidding.
Two of the most important acronyms these days are RTB and DSP. While they might blend in with the others at first, they’re actually very useful tools in a marketing arsenal.
RTB, or real-time bidding, and DSP, or demand-side platforms, are important tools to keep in mind. In fact, they can be used together to great effect.
There’s a lot to be aware of, but with a good understanding of what these two concepts are, and how they are used, you can put them to great use yourself in your marketing strategies.
Marketing in the Online World
Real-time bidding and demand-side platforms both originate with online marketing, which has grown to become the most profitable marketing space in the world.
There are a lot of strategies to keep in mind when marketing online.
And finding the best fit for you is difficult.
It only becomes more difficult with how rapidly things change in the digital world, and marketing is no different.
It wasn’t that long ago that individual bids were manually made for ad space, much like in the old days of TV spots.
But even that has seen a shift towards this new kind of marketing.
Real-time bidding and demand-side platforms have risen to the top to become the two most prominent means of purchasing and allocating space on ad platforms.
If you aren’t already making use of the two of them, regardless of which side of the process you’re on, you should strongly consider making that change.
In the complex world of online marketing, RTB and DSPs make things much, much easier.
Neither one of these tools that we’re going to talk about are a total solution on their own.
Rather, they should be used in conjunction with a solid online marketing strategy, to supplement each other and the other techniques that you apply.
When used in this context, these two become effective tools in online marketing. Making smart use of them can greatly increase the reach and efficiency of your marketing.
What Is Real-Time Bidding?
Boiled down to its most basic concept, RTB, or Real-Time Bidding, is exactly what it sounds like.
It is a real-time function that determines which advertiser gets space on a webpage.
For example, when a user opens a page, their browser will load all of the information on the page, including ad placement.
When this happens, a real-time bidding system will look at all of the different bids placed by different advertisers, and will automatically load the ad with the highest bid attached to it.
On the demand side, advertisers are constantly placing bids in RTB systems.
Every time a new ad is loaded, the system looks in this pool for the highest bids, and loads that ad.
That might sound strange at first, but real-time bidding actually has several advantages going for it.
Benefits of Real-Time Bidding
First of all, statistics show that real-time bidding is the wave of the future for online marketing.
In the past decade, the amount of money and resources that are being dedicated to this system of advertising has gone up a tremendous degree and shows no signs of slowing down.
Adopting this system yourself immediately puts you within that market, front and center in the eyes of potential clients on the demand side of the equation.
The automated nature of the system, while it may sound confusing at first, actually streamlines the process tremendously.
The system is entirely automatic; you establish the ad space, and the advertisers place their bids in the online system.
These bids are automatically analyzed and selected by the system, and the one with the highest bid is loaded into your ad space.
All of this happens within a span of milliseconds, without requiring any work from you or the advertiser.
What Are Demand-Side Platforms?
In a nutshell, demand-side platforms are services that allow a prospective advertiser to quickly find profitable, cost-effective ad opportunities online.
The advertiser supplies the actual body of the ad, and from there the platform searches across every supply-side platform, searching for the one that provides the most viewership for the lowest cost.
There’s a lot more to it than that, but for the purposes of our conversation, that’s the gist of it.
One final thing we need to talk about is how the DSP makes it’s decision for the advertiser.
Demand-side platforms look at a lot of data from potential advertising markets. Typically, this data includes things like the demographics of the website, its layout, high traffic times, and other important data like that.
It compares that data to the current cost of the ad space and makes a decision as to whether or not that particular space is worth the cost.
From there, the process is simply rinsed and repeated until a decision is made for that advertisement. Then it goes on to the next one.
This brings a lot of benefits to the advertiser.
It removes a lot of the guesswork and busywork from the demand side of the equation and streamlines the process of acquiring ad space.
But for our purposes, it has another benefit. It fits perfectly hand in hand with a supply-side real-time bidding platform
How Does It Work?
Now we know what RTB is, and we know why it’s so popular. But how does it actually work?
Basically, an advertiser reaches out to a demand-side provider, giving them information about the ad they’re trying to place.
The DSP then connects to an ad exchange, where their ad enters a marketplace full of available ad inventory.
The DSP runs their ad against all of the available ad inventory, and when suitable openings appear, automatically places a bid based on the perceived value of the ad space.
On the provider’s side, the RTB system keeps track of all of these bids and automatically selects the highest bidder for their ad space. It then automatically loads that specific ad the next time the ad space is loaded by a device.
RTB and DSP
Now let’s talk a little more about how well these two systems work together.
First, let’s make sure we’re clear on the difference between the two because they can sound similar.
Put simply, real-time bidding is the supply side of the equation. That’s what the website owner or the owner of the ad space is using to find an advertiser.
Demand-side platforms are what the advertiser is using to find said ad space.
They’re two sides of the same coin and provide numerous benefits when used in conjunction with one another.
The RTB streamlines the process on the provider’s side. It automatically keeps track of all incoming bids that are sent by the demand-side platform, and makes the decision every single time that the ad space is loaded by a user.
This makes it much easier to capitalize on your ad space, allowing for greater volume and variety of ads for much less work than different methods.
Meanwhile, for the advertiser, the two in conjunction make it much easier to get your ad up on a website, and on as many websites as possible.
This gives a greater return on investment in the short term and naturally leads to greater profits in the long run as well.
For these reasons, this style of marketing is taking the online world by storm.
This may sound like it overlaps a lot with other marketing systems, like ad exchanges and programmatic advertising.
And if you think that, congratulations. You’re right, for the most part.
There is a lot of overlap, and thinking about them as distinct from one another isn’t always the best way to look at it.
RTB in particular should be looked at more as an evolution of these earlier marketing strategies. It takes many aspects of them into account and builds upon that foundation to provide a quicker, more efficient approach.
Let’s take a closer look at the way RTB compares to those two systems.
RTB and Ad Exchange
First off, a quick refresher.
An ad exchange is essentially an online marketplace for ad space, where providers offer their ad space, and advertisers can make bids for it.
You can probably already see where this is going.
As we said before, thinking of real-time bidding and ad exchanges as two distinct and separate things isn’t really an accurate assessment.
These days most, if not all, ad exchanges make use of real-time bidding within their system.
An ad exchange likely deals with thousands upon thousands of different transactions at the same time. Automating these systems is a given, and these days, real-time bidding systems are by far the most common.
Whether the exchange is an open or private marketplace, RTB has been implemented in pretty much every situation to make the process as simple and easy for both sides.
RTB and Programmatic Advertising
As with RTB and ad exchanges, thinking of RTB as separate from programmatic advertising isn’t really true.
Rather, RTB is one aspect of programmatic advertising. With that said, it’s a vital aspect.
Programmatic advertising, in the simplest terms, is the automation of purchasing ad space online.
Programmatic advertising is the method by which we acquire so much of the demographic information that RTB and demand-side platforms use.
Ad platforms keep track of all kinds of information; average age, race, and gender of website traffic for example. As well as location services, if the website or app tracks that.
And oftentimes, the information goes even deeper than that, such as the device used to view the ad, the time of day, and so on.
This is all crucial information for effective marketing, and anything that keeps track of that kind of information is doing programmatic advertising.
As such, it’s not hard to see the overlap between programmatic advertising and RTB and DSP platforms.
The two work in conjunction with one another; real-time bidding services compile all of their stored demographic information and provide it to the demand side platform to help it make its decision.
With this information in mind, it’s easy to see how RTB and DSP are part of the larger umbrella of programmatic advertising, rather than something separate.
The Future of Online Marketing
Real-time bidding and demand-side platforms are the gold standards of online marketing today, and they show no signs of going away any time soon.
The benefits of these systems are simply too great to ignore, and their widespread adoption makes trying to get by outside of them difficult at best, or even impossible.
Of course, if you’re new to online marketing, or unfamiliar with the systems, the whole thing can seem daunting.
That’s where we come in.
Finding great marketing tools is invaluable, and we’re here to help.
With cost-effective techniques, low pricing, data-driven growth, and plenty more, we’re here to help you find the marketing solutions you’ve been looking for.
Of course, this probably didn’t answer all of your questions. After all, this is a complex field, to say the least.
So get in touch, and get a free marketing strategy session today.
We’re here to help you get the word out, and get as much bang for your buck as you can.
The world of online marketing is big, complex, and can be daunting. But with our help, we’re confident you can achieve the results you desire.