WTF is Real-Time Bidding? (in 30 seconds!)
October 15th, 2009
In the coming weeks we’ll be exploring the three major drivers that we feel are driving innovation in Display advertising.
1. Real-Time Bidding
2. More advanced user intent techniques
3. Dynamic Ads
So to start, here’s a good overview of what Real-Time Bidding is and what it’s doing for Display! In 30 seconds:
Clever – you should also check out the RTB stuff over at Mikeonads.com.
Not that clever, the distinction you make with a traditional exchange is false. Making different bids for each single item of inventory has always been available from real ad exchanges using predefined rule sets combined with pixels(cookies).
What actually has changed is that the decision making rules and data storage can now reside and be executed within a bidders own infrastructure.
Which kinda makes the whole difference. When you’re confined to the targeting abilities a line item gives you, your ability to make a decision at a granular level is way limited. Federating the Real-time auction part to advertisers/demand aggregators enables the usage of proprietary data and algorithms to accurately price impressions. As any trader in Wall St. knows, the big, sustainable margins come from moving away from average/bulk to accurately pricing the variances, and doing it faster than the next guy. This is what RTB unfolds.
It is true, though, that from a landscape perspective, the real transformation in the media market is not just RTB per se. It is the fact that media trading algorithms and black boxes are replacing media buyers sitting on the phone, and large line item excel spreadsheets. As such, the role of traditional ad networks will change dramatically.
And peter, yes, I avidly read mikeonads – He’s plenty smart.
E