Mobile Real-Time Bidding

Extending Mobile Advertising Through Real-Time Bidding

by | Apr 21, 2015


That’s all it takes for real-time bidding, or RTB, to complete its process. In the time it takes to load a webpage or app, ad inventory is efficiently bought and sold by automated computer systems.

So it’s no wonder that the technology is being proclaimed as the future of mobile ad buying.

RTB is a complex process with a reasonably simple explanation. It works like this..

The RTB Process

Real-time bidding requires three things to be completed:

  • a publisher
  • an ad exchange
  • a DSP

The publisher initiates the process by offering up ad space to be bought by an advertiser. That ad space, called inventory, is then distributed and auctioned off by an ad exchange, which acts as a kind of middleman. Finally, a mobile demand-side platform, or DSP, negotiates the buying of the ad inventory on behalf of the advertiser.

Multiple advertisers will bid in real-time and the ad is sold to the highest seller.

The Result

Think of it as an auction that takes place before you can blink your eyes. The process is carried out nearly instantaneously while the browser is loading your webpage. Many of the ads you see on a webpage or inside an app are a direct result of this process.

But the highest bid isn’t the only determining factor of what ads you see. Ads that ultimately appear are determined by a variety of factors, including your past online behavior and current location.

Mobile devices like smartphones now enable advertisers to target incredibly specific consumer segments. RTB ensures that these targeted segments receive only the most relevant ads quickly and efficiently.

Mobile RTB Implications

A while ago, Business Intelligence published a report entitled The Pulse of Digital. It offers data-fueled detail on the ways in which RTB stands to make a major difference in mobile advertising.

  • Better Monetized Inventory – The glut of ad inventory as global audiences rush into mobile has dragged down mobile display ad CPMs (CPMs refers to the cost per thousand impressions). That means publishers can’t monetize their mobile audiences effectively via ads. Advocates of programmatic — or automated buying and selling — say it can deliver the scale and efficiency needed to effectively match buyers and sellers and boost CPMs.
  • Leveraging Location Data via RTB – RTB is a style of programmatic buying in which digital advertising opportunities are auctioned off in real-time. The auctions take place in milliseconds as advertisers bid on the right to show you an ad immediately after you open an app or click to a new web page, with granular control over demographics, context, location, etc. On mobile, RTB could be extremely powerful because consumers take their devices everywhere — to the mall, the car dealership, Starbucks, etc.
  • Controls & Efficiencies – Believers in RTB and programmatic for mobile say they are making giant strides in perfecting their technologies, so they’ll have the ability to leverage consumer data on mobile and track users as they do on PCs (while still being sensitive to privacy concerns). That will include location, contextual, and demographic data layered atop real-time ad requests.
  • Higher CPMs – Some publishers already achieve higher CPMs with RTB than they do with blind buying of impressions on traditional ad networks. As a result, RTB is seeing wider adoption across the mobile ad ecosystem, and positive momentum on both sides of the equation. The sell-side is providing more premium inventory, and larger publishers. And the buy-side is seeing more demand for RTB from advertisers and agencies. Of course, RTB and programmatic are contributing to hyper-efficient markets where ad prices tend to be low. The key is for RTB to bring scale to premium mobile ad marketplaces, bring in scale-focused brands, and lift all boats that way.

RTB may indeed be the future. The expected surge in mobile advertising is only going to expedite this eventuality.

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What do you think? Is real-time bidding the way of the future for mobile advertising, or does it open up advertisers to potential risks? We’d love to hear what you think in the Comments below.