Demystified : Programmatic Buying and Real Time Bidding (RTB)


Demystified : Programmatic Buying and Real Time Bidding (RTB)

Digital Media spending in India is increasing, especially given that many startups have been able to raise money significant enough to leverage Digital advertising to reach out to their customers. It helps in improving sales, directly or indirectly on mobile devices or on social media.

Meanwhile, online advertising technology has been growing at an incredible speed. Many new methods are created and tested to get better efficiency in buying the ad space. Programmatic buying has been getting a greater importance in the recent years and is also been used as a tool belt by many media buyers.

Defining Programmatic Buying

Programmatic buying is an automated transaction between the buyer and the seller where

  • the buyer can determine the quality and subsequently the price of the audience on the fly
  • the seller can identify the best value for their ad space
  • the best sale price is determined through a multi-party auction
  • the best determined buyer gets to buy the ad spot.

The auction between various parties happens through an ad marketplace or an exchange and this auction leverages a protocol called Real Time Bidding (RTB) which helps various parties communicate with one another.

What has changed?

Programmatic advertising has changed the way on how the digital ads are bought and sold. It benefits both brand advertisers and direct response advertisers.

Marketers can now bid at an impression level instead of placing a flat priced purchase order and placements which reduces friction in the process, reduces cost of acquisition of customer and introduces efficiency in the overall process.

Companies bid for ad impressions that targets and caters to specific customers/ different market segments depending on demographic, psychographic and behavioural and also at appropriate place, to person and at time, across different media platforms.

Apart from measuring the clicked or rendered ads, apprehending and analysing rough data about the end user who clicked the ad or viewed ad. Measurement to track the number of impressions that was visible and the duration of the visibility. Sophisticated algorithms provide hard metrics on the effectiveness of brand lift campaigns that help ads which has no online calls-to-action.

The New EcosystemProgrammatic Buying

Advantages to Publishers

Publishers can use programmatic buying for various reasons. Publishers can understand their inventory (pricing) and select options between the inventories that appeals the most to the marketers. They can take control on the appropriate inventory, segment it and use different tools to ensure that the most suitable inventory is provided to the exchange.

Publishers should keep in mind about various ad packages that are provided to the marketer and differentiate them from what can be purchased programmatically. They should select a methodology that marketer follows and develop tailored programs so as to take advantage of the content, brand and the voice of publication being sold.

Publishers should take full advantage of programmatic buying as it is considered to be a very efficient sales channel, and if deployed properly, will generate new revenues, improve yield, increase fills and overall revenues.

They should select a methodology that marketer follows and develop tailored programs so as to take advantage of the content, brand and the voice of publication being sold.Media Buying Forrester


Global digital ad revenues will increase by 13.4 per cent to be at USD 113.6 billion. By 2016, according to eMarketer, US online ad spending will reach to $62 billion, of which 43% of it ($26.66 billion) will be towards branding efforts. IDC forecast explains that through 2016 RTB will grow upto $13.9 billion, total display advertising spending will grow to 20% and indirect display ad sales will grow by 44%.RTB

Third party data providers

Third party data providers (like Bluekai – US, Precision Match – India) have an effect in increasing the value of the impression and improving the yield. Audience segmentation and targeting is a core part of programmatic buying these days.

What else do Advertisers and Agencies need to know?

Programmatic advertising is also driving adoption of key metrics like viewability, audience segmentation and targeting, significantly higher transparency and data driven decisioning.

Advertisers can now choose to pay more for higher quality impressions and chose to not to buy lower quality audiences, all of it on the fly.

The Future of Programmatic

These are some predictions for programmatic advertising:

  • Large shift in spends towards programmatic including mobile for India and Global Markets
  • Higher operational efficiencies and better ROI for both publishers and advertisers as platforms get mature.
  • Premium inventory will also begin to shift towards Programmatic Model.
  • Programmatic will drive creation of standards and platforms allowing advertisers to customize what their programmatic optimization is going to look
  • The ad network model will continue to erode in value provided to customer and thus will become obsolete.

[Contributed by Namrata Jain, Marketing @ Reduce Data & Asif Ali, Founder @ Reduce Data]

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