What Is RTB Marketing and Why Do You Need It?

If you’re a business who wants more effective marketing, your plan has to include rtb marketing.

It’s not even a question anymore if people are shopping online. The vast majority of Americans are online shoppers, so any good marketing strategy needs to include advertising where people are buying.

However, it may be difficult to know what online marketing strategy would be the best use of your marketing budget. If you’ve done any research into the different strategies available, you may have come across one particular strategy called RTB marketing that has become extremely popular.

But what is RTB marketing, and why are companies spending billions on this strategy?

While this is a complicated subject, don’t worry. We at Media Shark have put together a guide that breaks down this strategy so it’s easy to understand.

Read on to learn what RTB Marketing means, and why you should be using it.

What is RTB Marketing?

RTB stands for real-time bidding. It is an efficient online marketing strategy in which advertisers and marketers bid in real-time for ad space on a webpage.

The basic idea is that when a webpage gets a visitor, it is able to show that viewer an ad. However, some visitors are more valuable to advertisers than others.

To get the most value from an impression by a specific visitor, the ad space on the webpage is put up for auction. Advertisers and marketers then bid for the ad space based on how valuable they believe the webpage visitor is.

Now if this seems complicated, that’s because it is complicated. This a long process that is completed in an insanely small amount of time, which needs to be broken down for a full understanding.

Who/What is Involved in RTB Marketing?

First, let’s break down who and what is involved in RTB Marketing:

  • Publisher – this is the person or company that owns a website. They are the ones that create content to draw in visitors and sell ad spaces on their webpages to be shown to these visitors. This selling of ad space is how online publishers like YouTube or the New York Times can make money.
  • Visitor – this is anyone who visits a webpage. They are the ones who could potentially click on an ad and buy a service or product.
  • Publisher Ad Server – this is a system in a publisher’s website that determines what to do with ad space. It can determine the appropriate response based on what it knows about the visitor.
  • Supply-Side Platform – this is a system that connects the publisher ad server with ad exchanges.
  • Ad Exchanges – these are systems that connect to buying systems and run ad auctions.
  • Demand-Side Platform – these are buying systems that participate in ad auctions. Advertisers and marketers use these systems to bid on ad space.
  • Agency Ad Server – this is a system that keeps track of ad performance for an advertiser and shares ads with publishers to fill an ad space.

What Does the Full RTB Marketing Process Look Like?

With an understanding of who is involved in RTB marketing, we can start to discuss the full process.

When a Visitor First Gets to a Publisher

The actual RTB marketing process starts when a visitor clicks to a webpage produced by a publisher. When they do this, the website pulls up all the code needed to deliver the webpage to the visitor.

In this code is information on ad space that links to the publisher ad server. This server takes what it knows about the user to determine what to do with the ad space available.

Now, if you’re wondering how an ad server can know anything about a visitor, the answer is actually pretty simple. Each visitor carries around data with them – like cookies – can potentially tell a website different things, including:

  • The general location of the visitor (for example, they are from the United States).
  • The demographics of the visitor (for example, age, race, and gender).
  • What they’ve recently been browsing (for example, they’ve been searching for basketball t-shirts).
  • What sites they’ve visited recently (for example, they’ve been to online sports clothing stores).
  • If they’ve been to the publisher’s website in the past.

The ad server considers this information, and then makes a decision on what to do with the ad space available on the webpage. 

Some publishers may have prioritized ad buyers who have already paid a premium for the ad space and/or for that specific type of visitor.

However, if there isn’t a prioritized ad buyer for this situation, then the publisher ad server moves into the RTB process.

Moving the Ad Space to an Ad Exchange

The publisher ad server’s next step is to move the ad space opening to a supply-side platform to sell the ad space on the open market.

When the supply-side platform receives the information that the ad space is available, it takes another look at the visitor. The platform looks to see if it knows anything else about the user, and then uses that information to move the ad space into an appropriate ad exchange.

In the ad exchanges is the system that connects with potential buyers. These buyers usually use demand-side platforms to connect with the ad exchange so they can buy ad space.

Once connected, the ad exchange will put the ad space up for auction, and the demand-side platforms will have fractions of a second to put in their bids.

How Bidding for Ad Space Works

It’s important to note that there are not people sitting at their computers waiting to click a button as quickly as possible. The systems are programmed to bid at a certain price depending on the information available on the visitor.

You can think of this as similar to a stockbroker buying stocks on the stock market. The broker can be told to spend a specific amount of money to buy a certain stock when the correct conditions are met.

For advertisers and marketers, they can set different bids based on different attributes of a visitor. The more valuable the attributes to that advertiser, the higher the price of their bid.

For example, an online sports clothing store may be willing to pay twice as much for someone who they know is looking for basketball shirts than someone who is looking for just general shirts.

With the bid information programmed, each demand-side platform places their bid for the ad space available. The ad exchange determines the highest bidder and sells the ad space to that advertiser.

Filling the Ad Space with the Winning Bid

The demand-side platform for the winning bidder then focuses on getting the ad information all the way back to the publisher and, more importantly, in front of the viewer.

The demand-side platform does this by providing the ad exchange with information on how to connect to the advertiser’s agency ad server.

This information is then passed on from the ad exchange to the supply-side platform, from the supply-side platform to the publisher ad server, and from the publisher ad server to the publisher.

Once the publisher has this information, it can link its website’s code to the advertiser’s agency ad server. When the publisher links to the agency ad server, an impression is registered for the viewer, and the actual ad is shared with the publisher.

The publisher then takes the ad and places it in the ad space next to their content and in front of the visitor.

As we said earlier, this is a long, complex process. However, because the entire system is programmed, each step takes milliseconds and the entire process can be done in the blink of an eye.

This is why whenever you go to a website to read a news article or check out a blog, you don’t have to wait for ads to load along with the actual content you came for. Publishers and advertisers have built a system that ensures that as soon as the content is available, so is the advertisements.

Why RTB Marketing?

RTB Marketing is only one of many effective online marketing strategies. However, it’s become a popular strategy for a few reasons.

More Valuable Impressions

First is how RTB allows marketers and advertisers the ability to gain more valuable impressions. 

Consider if an advertiser pays to place an ad in front of every visitor a publisher has in a day. This strategy seems beneficial because it could put a company’s ad in front of thousands of different people, giving the company thousands of opportunities to turn an impression into a sale.

However, this is not always a cost-effective option. While an ad may be in front of thousands of people, their data could show that only a few dozen may even be interested in the product or service advertised. 

That means that most of the advertiser’s budget was spent showing an ad to people who had little chance of actually clicking on the ad. RTB offers a more cost-effective solution.

Instead of paying a standard price for an ad in front of any viewer, a company can focus instead on paying whatever amount they feel a specific impression is worth. With RTB marketing, you can put more of your budget towards attracting your target audiences.

More Flexibility

With RTB, companies can more easily tweak their online marketing strategy. Because RTB is done in real-time and involves so much data, marketers can quickly see trends developing in their marketing efforts.

Companies can start to see how valuable impressions are based on how many ads their selling and how many impressions are being converted into actual sales.

If a company is having trouble winning ad space in the ad exchange, it can learn that the value of their target audience is considered higher by the market. The company can then look at raising their bids, or going after other audiences.

Companies can also see how many of their high valued impressions are actually being converted into sales. If the is a low conversion rate for highly valued visitors, then a company can reassess how it values specific visitors.

Better Control Over Ad Placement

With RTB marketing, advertisers don’t just control who their ads are shown to. Companies also can have more control over which publishers are receiving their ads.

There are companies like Google that are constantly improving their systems to ensure that ads placed through RTB aren’t ending up on unseemly websites.

There are also lists available that separate trusted websites from those that a brand would not want to be associated with.

These lists can be included in the programming for a demand-side platform, ensuring that your ads end up exactly where you want them to.

Make RTB Marketing Work for You

Now that you know the RTB marketing process, you might be wondering how you can jump in and make this process work for you. This is a good online marketing strategy, but it needs to be done right. 

This complex process can be difficult to start and needs to be managed correctly to get the most out of it.

Since the process involves the personal data of many people, you can find yourself in legal trouble if you don’t know what you’re doing.

Thankfully, we at Media Shark here to help you with RTB marketing, YouTube marketing, and any other online marketing needs you may have.

To learn more about what Media Shark is capable of, click here. Are you ready to get started? Contact us for a free marketing strategy session.

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