Real-Time Bidding is a super-effective model of interaction between publishers and advertisers. It gives both sides the ability to get the best possible results for their online business. If you deal with Traffic Arbitrage, you definitely have to use this too.
The model is often called RTB, which is a simple abbreviation. Still, it can confuse many newbies. RTB is something everyone is talking about, so let's find out what it is and how does it all work. The first step is to get a basic understanding of the Real-Time Bidding model.
What is Real-Time Bidding?
Imagine that advertisers are able to pay only for the impressions they really require and publishers can sell every impression for the best possible price.
That's exactly what RTB is about. It's an intermediary between two parties, which helps them to get what they want. As a publisher, you can maximize your revenue and sell the entire inventory you have, which is not possible when working with Affiliate Programs on regular basis. At the same time, Real-Time Bidding saves advertisers from buying waste impressions and overpaying.
If we dive deep into the basics, RTB is a form of programmatic advertising. Actually, this models is one step ahead of other programmatic advertising methods. One of the biggest advantages of RTB is that the impressions are being bought and sold in real time.
There are two parties, which take part in the whole process. The first one is publishers. They use a supply-side platform to get the best possible result from selling ad inventory on Real-Time Bidding basis. It all allows them to get the highest price for every separate impression and to sell everything they have. In turn, advertisers use demand-side platform.
This one is aimed to buy only the appropriate impressions for a relevant price. The decision is made using a number of essential parameters you’ve set. The whole process is automatic on both sides.
How does Real-Time Bidding work?
Everything starts when the visitor loads the publishers’ page. That’s where the impression is created. It is immediately sent to Real-Time Bidding system together with the essential info about the visitor (demographics, GEO, behavior, OS etc). It all creates a bid.
Now it’s advertisers’ time to act. They automatically set their own bids according to the pre-set parameters and their budgets. As it all works as a live auction, the impressions are sold to the advertisers, whose bids are the highest.
The first best bid allows you to get the first impression, the second one will bring the second impression and so on. Real-Time Bidding process repeats for every new ad unit on the page.
RTB is fully based on the market demand and supply. Advertisers pay the sum of money they consider appropriate for a certain impression. At the same time, impressions are sold by publishers for the highest possible price in terms of market demand.
Buying rules and personal limits in Real-Time Bidding
Why? Cause Real-Time Bidding will not only deliver you right impressions, but it will also save you from overpaying. The system of bids is build in the way that the first best bid will be only a bit higher than the second one, no matter how big it really is.
The actual exceeding depends on the system, but it's usually around $1 or a bit more. It all gives you unlimited possibilities for buying traffic to use it for various Affiliate Programs then.
On the other hand, this Real-Time Bidding rule is quite uncomfortable for publishers. To avoid loosing money, they have to set a minimal price limit. It means it'll be impossible to buy impressions for lower price. This is a quite effective method, if you know the real value of your impressions. In case you overvalue or undervalue them, you'll lose money.
Why Real-Time Bidding is so good for publishers and advertisers?
Talking about publishers, Real-Time Bidding gives them the opportunity to sell all their inventory for the highest possible price, which is exactly what they need. Moreover, they can be sure they'll always receive a decent income. It's all because of mentioned price levels they can set.
As for buyers, they receive everything they need for Traffic Arbitrage. First, buyers get right impressions, so they don't waste money on nothing. Second, Real-Time Bidding relieves them from negotiations, giving direct access to what they want. At last, dozens of publishers deliver traffic to the system, which means the options for targeting are almost unlimited.
Choose a right platform
RTB gives a lot of benefits for both impressions buyers and sellers. However, it all has no sense if you'll select a bad platform.
Be careful concerning possible fraud and choose only those platforms, which deserve your trust. This will save you a lot of time and money. Don't forget it when you'll be searching for an appropriate platform, no matter you're going to buy impressions or sell them.