Advertising Technology

Decoding RTB: Breaking the Acronym to Understand the Practice

By Christopher Hansen
Christopher Hansen is President of Netmining, a provider of display targeting solutions. Christopher has 14+ years experience working in digital media at companies including 24/7 Real Media and 360i.
As the media industry evolves, fresh lingo floods the market. We’ve seen this with search, mobile, social, video, networks, exchanges and now real-time bidding (RTB) and display media. Because of our industry’s dynamism, the media glossary is a living, breathing, endless list. But, within segments where ad technology and granular media mechanics are heaviest, the lexicon and acronyms are especially tricky. For example, the entire segment of RTB – DSPs, SSPs, MMPs – is absolutely awash in alphabet soup. Yet, the market is booming, with a reported spending growth of over 200%, from last year – and numerous other stats indicating the rise of RTB.
Even though the segment is thriving, talk to agency supervisors, and they will tell you that their teams are still foggy on the terminology and intricacies of the real-time bidded display market. So, one of two things is true: none of it matters and this is a passing trend or those transacting business in this arena are winging it without full understanding.
The trajectory and steady investment within this ecosystem, despite the fogginess, indicate that it is the latter. And, that can be fixed.
It’s important to look at the big picture of what it means to strategize, plan, operate and optimize in real time. Decoding RTB and developing a full scope of understanding all things “real-time” is critical to sustaining the momentum at hand – and claiming its full potential.
First, What RTB is Not
Contrary to unfortunate popular misconception, RTB does not mean remnant inventory, it does not mean sub-premium, low-quality – or even exchange inventory. In fact, it does not directly refer to the inventory at all. It refers to the pipes and not the water; the wire and not the current. It is the mechanism by which we can pinpoint, transact and optimize inventory in real time.  Publishers of all ilk are allocating increasing share of their inventory to this framework. And in order to avail ourselves of it, we must understand that the real-time operability extends beyond bidding. It extends beyond knowing how to execute bidding rules. We must think in a more expansive way about the immediacy RTB provides.
Achieving the Real-time State
Yes, RTB refers to a mechanic – but it also refers the greater possibility of all things real-time. We now have the capability of targeting our audience with such efficiency, data availability, clarity of decision-making and scale – that we have a whole new level of proficiency for achieving our objectives and continually raising the bar on what’s possible in the first place. Using these systems and operating in real time, unlike ever before, takes us to a state that allows us to rethink our scope and operate with more control and visibility during all phases of work. This is the real-time state:
  • Media planning is better informed by real audience cases, and data profiles, as agency teams progress, iterate and plan future campaigns
  • Targeting with increasing comfort, expanding on known best-customer profiles and trying new combinations is no longer a leap or a guessing game
  • Execution, measurement and optimization are both more nimble, every step of the way
If we think beyond bidding and consider RTB in a more expansive way, embracing the “real time” state in general – it has key implications to our campaign workflow and how people collaborate and operate throughout. This translates to more strategic and operational value to our clients. The strongest marketing execution – whether for branding or direct response – is efficient at every turn. A real-time mindset helps assure that efficiency at every phase.
 
Making Our Teams Successful with RTB
We’ve been talking for a long time about the power of data to maximize inventory and yield. Yet our systems for doing so are only as good as our team’s capacity to operate them. Having the tools, the trading desk, the access and the data at our fingertips are one thing. But this does not automatically translate to audience intelligence and operational prowess.
System and audience intelligence capabilities are only as good as a team’s ability inside the agency to deal with the assets and the data in a trained, thoughtful, strategic way. We do a great disservice by simply handing over a tactical checklist to running the system. Take the time to foster an ethos of real-time media at the agency – and then train and develop an agency workflow around that imperative. When in play, the real-time approach threads research, strategy, planning, execution, analysis, and optimization.
Why RTB Matters
Gone are the days where we plan and buy only based on media context. Yet, we may never reach time in this industry where it’s solely about buying audience. The savvy marketer and his or her agency are constantly leveraging both – media and audience. After all, why create unnecessary limitations? If we take advantage of the real-time capability in the broadest sense of the term, we can hit new levels of visibility, intelligence and operability.
We know the industry loves to rail on acronyms. Alas, I acknowledge RTB is not a true acronym, like RADAR or FUBAR. But, regardless of how we feel about acronyms, abbreviations and other lingo, clarity of terms is vital. RTB itself would be more correctly defined as an initialism, but that would really make for an awful column title.
 
  • Andrew Casale

    I like the separation of RTB the protocol from the unit of trade. More of this education needs to happen, those on the sidelines still think of it as a means to clear low value impressions at low prices. RTB can and is increasingly being used to clear higher value media at higher prices, the model conforms to whatever it is fed.

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