How Does Real Time Bidding Work in Marketing and Advertising?

by Robert Clough

It seems that the world of advertising changes every day. There are new technologies and new ways to advertise your business.

One of the ways that advertising has evolved for both advertisers and publishers is through real time bidding.

This method of advertising is starting to change the publishing industry and it’s giving advertisers a way to lower their costs.

Are you ready to learn more about real time bidding? Read on to find out what it is and how you can leverage it in your business.

A Little Background Story

In order to understand what real time bidding is, you need to know a little bit of history. In this case, it’s the history of publishing.

Before everything was online, magazine publishers would sell advertising space before the issue went to print. Publishers would make money on advertising revenue and on subscriptions.

When a publisher didn’t sell the entire advertising inventory, a publisher had two choices. They could run the issue with empty space meant for ads. The other option was to sell the ads at a discount.

These ads were called remnant ads because they were the remaining ads in the inventory. Publishers thought it was best to have some money come in for those ads than run empty space and lose money.

Sales reps would call around to fill up that remnant ad space.

Other industries do something similar. Airlines will sell last-minute seats at a discount, so they won’t have to absorb the costs of flying an empty plane.

What Is Real Time Bidding

You’ve already seen how artificial intelligence has impacted various parts of marketing. Google uses it in providing search results.

Artificial intelligence has now impacted the way advertising is bought and sold.

The RTB meaning combines the best of artificial intelligence with remnant ad space. You’re basically bidding on ad space from various publishers.

That ad space gets sold to the highest bidder. If you bid on advertising, you’re bidding on the number of impressions you get from an ad placement.

From a publisher’s perspective, you have a chance to sell your inventory without relying on a sales team like the good old days. Since you’re selling to the highest bidder, you’re not cutting your prices too much.

How to Use Real Time Bidding

How can you get started with real time bidding? Both publishers and advertisers have to sign up on an ad exchange. This is a tool that connects advertisers with the right publishers.

These ad exchanges will collect demographic data about site visitors and keep that in a database. That allows advertisers to find the right fit for their marketing.

Advertisers will bid on ad space and when they win a bid, their ad will get shown on that publisher’s network.

The Future of Advertising Is Here

Ever since print publications went online, one of the major challenges for these publishers is to monetize their offerings. One way you can make money and cut down on overhead is to use real time bidding.

Advertisers appreciate real time bidding because they can reach their intended audience at a price well within their marketing budget.

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