Improve Digital, a Programmatic company and MediaMath, one of the most well known Demand side platforms created a concise video that explains how real time bidding (RTB) works for the publishers who power the digital economy of the internet.
“The Battle of The Machines The Real-time Advertising era”
Back in the stone age of digital advertising, there were 3 major players. The Advertiser, Agency and Publisher. Today, the digital advertising landscape has new players due to technological innovations in AdTech such as Ad Exchanges, DSP’s, SSP’s Data Suppliers, Agency Trading Desks Delivery Tools, Ad Networks, Data Exchanges, DMP’s and many more.
According to forrester research, online ad spend is projected to grow from 30 billion to potentially $200 billion by 2016.
How does Programmatic work? Their Example: In the example Advertiser A is “BMW” and wants the ad impression because the user data shows that the person is has a strong interest in cars, Advertiser B who is “Apple” also wants the impression because the user is wealthy, and Advertiser C is Nintendo and knows the gamer wants to buy a new console, Advertiser D is matel and knows the user has a kid and they have a new toy on the market. While it would be great for all of these quality brand advertisers to get their message across, only 1 will win the bid.
So who wins the impression?
BMW losses the impression, they are on the block list on the block list. Many publishers do not want certain brands (who may be competitors) for many reasons and are able to blacklist their creatives from showing.
Matel Losses the impression – Their bid was too low and will not win this impression
Nintendo wins! – Nintendo bid the highest and will show their advertisement to the user.
On the publisher side many variables are calculated to determine who wins the bid and gets to show their creative. Advanced algorithms ultimately create a common denominator to boil down who wins the bid in 200 milliseconds! . Confusing and complex, yet amazing and necessary to sustain the ecosystem. Programmatic advertising is a powerful tool for advertisers to achieve massive scale and for publishers to maximize the revenue generated from every single impression.