Have you ever been at the auctions? We don’t speak about Sotheby’s, but even smaller ones have the same principle: they have a lot, offer it to the audience, than people bet money on it and the chairman finally says “Gone to the gentleman in a hat” and the deal is finished. The buyer gives money to the lot holders while the process repeats itself until the last item is sold out. Actually, it is almost the same for RTB.
Ad exchange actively sells and buys ads impressions among advertisers. The principle is absolutely the same as we discussed above, that one who offered the highest price has placed his ad.
How It Works In Details
- When a visitor comes to website plugged into ad exchange, the system immediately collects necessary information about him.
- Information that can be obtained: location, approximate age, male or female, sphere of interests on the ground of before visited websites, type of the device and others.
- The user with all his “history” becomes a lot and publishers start bidding for displaying an ad at the page he has dropped into. The winner pays the fee and shows his material.
- The browser finished loading the page and the visitor see those ads, whose advertisers bid for him.
Does it sound too long or difficult? Oh, calm down! The whole process took mere seconds and it will be repeated with all new users at that website and all the rest engaged in the system.
Benefits of Real Time Bidding
- Computers run the process. Humans are very smart, but, unfortunately, they can’t respond so fast.
- Errors are excluded. This benefit comes from a previous one: machines can’t get tired, sleepy or leave for vacation. They will perform their duties on high level no matter what the time or day it is.
- Publishers get a chance to sell out all their remnant inventory as the process here is focused on the visitor and his capabilities and not on website popularity;
- It is also a good chance for publishers to understand which audience come to his website and play with prices;
- More personalized approach to advertising: people don’t like ads, but if they are relevant to their interests it will lead to bigger loyalty and more positive behaviour;
- Advertisers, especially those who have just started their business, can state fix prices for their campaigns.
Is There a Chance For Traditional Networks?
Of course, it is. However, all the players in digital marketing pick up something from each other and there is something from RTB in other networks and vice versa. The whole approach is becoming more and more popular and if you are still not sure whether to implement it or not, think that you will certainly win your competitors who haven’t done it yet.