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What is Real-Time Bidding (RTB)?
Real-time bidding (RTB) is an advertising method where decisions to bid on ad impressions are made in real-time, targeting individual users based on third-party data. It allows advertisers to only pay for valuable impressions, significantly reducing wasted costs and enhancing campaign performance through data-driven insights. The process involves ad exchanges, demand side platforms, and strategic audience targeting, with the aim of optimizing conversion rates and return on investment.
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What is Real-Time Bidding (RTB)?
- 1. What is Real-TimeBidding? (RTB) Paul Gill © Search Laboratory Ltd 2013. All rights reserved. Leeds T: +44 113 212 1211 London T: +44 207 147 9980
- 2. Problems To Solve Testeddisplay advertising with no return Limited by generic search market Made direct website advertising purchases Invested in TV or offline with unclear uplift
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- 4. What Is Real-TimeBidding? Advertising through: Display banners - Static - Rich media Videos
- 5. What Is Real-TimeBidding? Targeting the user visiting a website not just the website itself Place the right ad in front of the right person at the right time
- 6. How Is RTBDefined? RTB is: “real-time, impression by impression based decision making” Campaigns make decision to bid on an impression in real-time
- 7. How Do WeRecognise A User? 3rd Party browsing data from multiple providers - User browses 3rd parties inventory - Their actions are recorded - Segmented into user demographics Day: Tuesday, Time 8:03am Highest annual income Gender: Male Location: Leeds 45-55 year old Interests: luxury cars, investing Post-graduate education More than two children
- 8. Traditional Display Vs.RTB Only pay for the valuable impressions: £1.65 £1.20 £0.64 £1.08 £10 CPM £3.12 Vs. £0.88 £0.23 £2.12 £0.77 Purchasing in bulk even though each impression has different value to campaign £1.65 £3.12 Purchase impressions based on their individual worth and only those which are valuable
- 9. The Benefits OfRTB Improving account performance: – Huge reduction in wasted costs – CPA / ROI never before possible with display – Unrivalled reporting and insight Access to huge volumes of data - Results only possible with statistical optimisation
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- 11. Ad Exchanges Facilitates buyingand selling of impressions in an auction Allow access to larger inventory RTB Traditional Display
- 12. Who We WorkWith Demand Side Platforms (DSP) Access to multiple, statistically qualified, 3rd party data providers Unrivalled reporting insight Live across 40 countries: - scale quickly across markets - gain insights for specific geographies (e.g. Yandex, Russia specific exchange)
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- 16. RTB: Bidding Process UserInformation Bids sent to auction Bid request Highest bidder advertises on websites impression Competitor User Website visited Ad Exchanges Bid: £0.00039 Search Laboratory Bid: £0.00042 Competitor Bid: £0.00034 Competitor Bid: £0.00012
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- 20. Conversion Focused Campaigns Clientswith direct response goals/ interactions Optimise towards conversion rate/ cost per conversion/ ROI Statistically led decision making
- 21. A Scientific ApproachTo Branding Bidding based on key demographics stats, useful for other channels Traditionally reported through surveys Integrate with analytics for reporting: - PPC, SEO, Analytics/ Social metrics uplift Brand Protection - Ad position, brand safe inventory - User generated content
- 22. Typical Timeline ForSuccess Strategic, engaged setup Month 1 Broad demographics Launch remarketing Build audience lists
- 23. Month 2 Gather data Keyconverting audiences / websites Improve lists
- 24. Month 3+ Increase investmentin what works Advanced testing Publisher negotiations continues
- 25. Next Steps Consider yourbusiness’ current challenges Look at effectiveness of other channels: – Traditional display – Offline/ print media – TV – Traditional remarketing Take into account the recommended min. monthly spend (£10k) Question how much you really know about your target audience
Editor's Notes
- #3 So just before we talk about what real time bidding is and how it works lets look at some of the problems our clients had experienced that we wanted to solve when committing to RTB as service that we could provide effectively through our commitment to statistically led advertisingTested display advertising with no returnLimited by generic search market but still required resultsNiche or extremely competitive marketsMade expensive bulk purchases with publishersI’m sure this will apply to some of you here todayInvested in TV/offline with no reporting insightsFrustrated by the lack of insight into the uplift for your business and what little uou learned
- #5 So in its simplest form RTB is advertising through banners and videos. Examples of rich media banners can be found in the hyperlink in the slide or at http://www.richmediagallery.com/gallery/
- #6 The important difference in this technology is that we aiming to target the correct user at the right time on whatever relevant website they are visiting. We want to show you, the user a banner because you are our target audience. We want to place the right ad in front of the right person at the right time
- #7 The technical definition that summarises how this is possible is that:RTB is: “real-time, impression by impression based decision making”When we talk about ‘real-time’ we mean that the decision to bid to show our banner is made in the time between the user choosing to visit a site and the page loading.We will be targeting the demographics & behaviour trends of relevant people to our client to ensure that we are bidding for impressions for those types of people.RTB is a solution to traditional display issues
- #8 So how do we define a target user?We work with 3rd party cookie data providers. Their job is to track the users browsing their inventory (websites) and records their actions. They do this across thousands of data points to segment a user into categories such as age, lifestyle choices, education levels, household income etc.We have hundreds of demographic targeting options across multiple providers. All of these have been statistical tested, so we can be confident of their accuracy.So, in the example above, if we had a campaign targeting those interested in luxury cars then the user above would be relevant to us and we would bid in an auction to try an show a banner/ video to them.
- #9 To demonstrate the efficiency of the approach consider the diagram above. The problem with traditional display advertising is that this model resulted in paying the same price per unit for impressions even though they each have a different value to the campaign. You may have purchased £5000 worth of impressions from Daily Mail and are now committed to that purchase for better of worse. These purchases would be made in bulk without considering who was viewing the ads, this is: InefficientDoesn’t allow us to focus our investment on impressions with highest ROI, or most relevant userHowever, What RTB allows us to do, which is displayed on the right, is bid on the individual impression.This box demonstrates the efficient and cost saving approach as we choose to not bid on the those impressions which are not suitable . For example, If we were targeting 45-55 year olds these crossed out impressions may be typically 18-25 year olds, who we won’t be paying to show our ad to.
- #10 Lets think about some of the benefits to the performance of display advertising with this approach:- Having control over the type of people we are targeting and not having so many wasted impressions means we have much greater control over:Cost effectiveness of branding CPMCost per conversion / R.O.IHuge reduction in wasted costsHowever,Non of these benefits are possible without a mathematical optimisation. The same statistically led optimisdation principles that can provide success within PPC can allow for these figures to be achieved in real time bidding.
- #13 We need a DSP that would allow us to segment and otimise results to whatever metric is a success for our clients. That’s why we chose Double Click
- #17 Let’s consider the process from a user visiting a site to us winning an auction and showing our banner to that user. For the purpose of this example we’ll say that we managing a campaign on a DSP are targeting a user who has a high household income:User chooses to visits publishers websiteIn the milliseconds before the page loads the publisher (the website) offers the impression up for auction with all its associated user data we previously discussedNow Remember, the user segmented demographics have been collected by the 3rd party data provider tracking the users browsing habits across their inventory in the weeks and months leading up to this visit3. The DSP’s have all set bids based on their value for this type of users impression (someone with a high household income)4. The bids are sent to auction in the ad exchange5. The winning bid is the highest (in this case) £0.42 Max CPM and the winning DSP pays £0.01 higher than the second lowest bid. So in this case the winner pays £0.40The winning bidder advertises on the publishers impression, the user sees the ad.
- #19 Before we look at an example of a typical RTB account. We will briefly cover some of features that we have seen before with search and GDN display advertising and how they are used in RTB in a new and powerful way. Keyword targeting (targeting websites with content including our keyword):Googles inventory only represents around a third of the overall inventory available, because of this we have much more data from which to optimise our campaigns.Remarketing:Aside from its obvious uses in presenting different advertisements to a user based on their on-site interactions i.e. users dropping out at the basket stage, it is vital in allowing us to segment and define the key user audiences of our clients.So by setting up a remarketing pixel when we start RTB with our clients it allows us to build up a list of users who visit the site and create audience reports to identify who is the target demographics. This avoids a gut feeling approach to targeting users.So if your audience is in a niche market, these lists would identify the other characteristics not previously considered that dine a typical customer or client(text that was in table)Contextual (keyword) targetingOver 70% greater reachStrategically combine keywords & demographic targetingRemarketing-Custom dynamic lists; converted, clicked, interactedRemarket across multiple networks/exchangesUtilise for 3rd party audience targetingCheaper CPMs than independentsAudience targeting-Target the right users at the right place at the right time-Utilise Remarketing to establish the next audience to target
- #21 The approach outlined in the campaign example is relevant for setting up a conversion focused campaignConversion focused campaigns don’t have to be revenue/ sales driven we still apply the same mathematical approach to optimising for CTR, ad interactions.Remember a conversion focused campaign is still a brand campaign!
- #22 Branding campaigns are where we really take advantage of both the cost saving, single impression bidding approach as well as the statistical testing. We are optimising campaigns for key demographics as well as making ‘premium’ publisher purchasing decisions based on audience performance stats.
- #26 Goals and targetsCompany brand, ethos & additional information