Real Time Bidding: auctioning the best targets

There is hardly a technology that is currently changing online advertising as quickly and comprehensively as Real-Time-Bidding (RTB). It seems to be taking hold in Germany as well. Industry insiders expect every second display ad to be booked in real time this year. The “Adform Media Barometer” shows that brands increased their advertising budgets for Real Time Bidding by 91 percent in the summer of 2013.

Prior to launching a campaign, advertisers define how much AdImpressions on various websites and by specific user characters are worth to them. On the other side, website operators (publishers) define the minimum rates at which they want to offer their advertising space (Ad Request).

Then, if a user visits the site, the auctioning AdServer requests bids from the customer servers for each display within milliseconds. The bidder with the highest bid wins the auction for the ad display and the banner of the company, for which awareness has the most value, is displayed for the user.

In this fully automated process, the user profile is the deciding factor as to which banner is display and at which price. The browsers and cookies stored on the computers convey information on the user profiles. The more information is collected, the more valuable individual users become. After all, advertising can now be displayed based on individual interests and wastage is thus kept to a minimum.

Based on current data protection regulations in countries like Germany, so-called retargeting plays a primary role in this regard. This can be used to advertise to those internet users who previously visited a certain company website or shop. They are earmarked using cookies (little browser entries) and can thus be recognised on other websites and addressed with the appropriate ads. The entire RTB process remains invisible to internet surfers. They only see the displayed ad.

By aligning their ads with user profiles, advertisers can make more efficient use of their advertising budget and prevent wastage. Even sites with less reach are now becoming more attractive to advertisers, because the value of the advertising space is not determined by the environment itself, but by the user profiles. On the other hand, RTB can make advertising more comfortable for the users because they are primarily confronted with ads that may actually interest them.

The positive effects and experience indicate that, in addition to online display advertising space, RTB will become established in the areas of video advertising and mobile advertising.

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