What is Programmatic Real-Time Bidding (RTB)?
Programmatic Real-Time Bidding has become an integral part of how everyone runs their business in the advertising industry, from the advertiser to the publisher and all the middlemen in between (agencies, trading desks, DSPs, SSPs, etc.).
What is programmatic real-time bidding?
Publishers auction off selected parts of their inventory while advertisers, or their middle man, bid on an impression of interest based on target markets. If the bid is successful, the ad is instantly visible on the publisher’s site.
Typically, real-time bidding is initiated when a user visits a website. The visit prompts a request – the “ad call,” and with it goes snippets of data about the visitor, such as location, demographic information, type of browser, among others. This information is processed and submitted to the system. Based on that information, the ad with the highest bid that is “looking” for that type of an impression (visitor) is served – and the ad is displayed on the visitor’s web page. The same process is repeated through a loop system until all ad slots are filled. The transactional process is fast and is completed within a hundred milliseconds.
Real-time bidding within programmatic
Sometimes the industry just talks about programmatic. Sometimes, it talks about programmatic RTB. Is there a difference? YES.
Real-time bidding is a programmatic tool with a limited scope and function. Programmatic is the large scale automation system that handles all the necessary parts of the process.
Why is programmatic RTB so popular?
There are many compelling benefits to utilizing programmatic RTB, for buyers and sellers alike. Advertiser demand is high because it allows them to cherry pick the impressions that are most likely to meet their campaign goals.
For sellers, programmatic RTB can deliver a 100% fill rate for their inventory. In addition, programmatic selling methods allow publishers to use computers to automate and bring real-time intelligence to what is otherwise a very complicated process, one that is lacking in data and that requires a large amount of manual effort.
The downside to programmatic RTB
But programmatic selling is not without its risks. A large chunk of product inventory available today through current programmatic methods is often questionable. The quality is often not up to par, and publishers end up displaying ads on their site that are poor quality.
In addition, the possibility that the ad served is not compliant with the publisher’s company policies is high. This is often the result of third-party placements, because the publisher has no control over what ad is served and from where.
Here are a few other reasons why programmatic RTB isn’t always the best solution:
•Malware – Malvertising is characterized by hackers looking for exploits where they will then insert their malware. Even robust programmatic systems can still have issues with malware. A publisher who works with certain ad servers or exchanges may think they are protected, as typically ad servers have anti-malware systems built in. However, there is a fatal flaw in the methodology of programmatic, as inventory is still sold via a third party and so bypasses the ad server/exchange anti-malware system altogether. (For more information about malvertising, check out The Secrets to Malware Detection in Online Advertising article.)
•Unsupported Ad Formats – It’s all too easy, through the input of incorrect data, for an unsupported file format to appear on a publisher’s site. When this happens, visitors are kept waiting as the page attempts to load the faulty ad, or an error message appears. In either case, it’s a less than ideal brand experience for users.
•Content Classification – Content verification and classification is extremely difficult to standardize. What’s “racy” to one publisher may be rather tame to another. For example, a publisher can set a policy to block certain categories they cite as brand inappropriate, e.g. female mud wrestling, which they classify as adult content. However, if the advertiser classifies women’s mud wrestling as “sports,” then the female mud wrestling ads could still be served on the publisher’s pages.