Real-Time Bidding to Increase Online Advertising Effectiveness

by Matt Klassen on August 29, 2012

To date online advertising has taken a ‘carpet bomb’ approach towards reaching its target audience, spamming ads across wide demographics in hopes of reaching a relatively small percentage. In fact, as I look at the advertising targeted to me this morning—with an ad for relief of the symptoms of menopause, one for debt relief services on the American East Coast, and one women’s weight loss—I have to wonder if advertisers know anything at all about me (Canadian, white male, mid-thirties), especially given the fact that ad networks like Facebook sell my information like its going out of style.

But as the challenges to online advertising mount, with viewers still having many ways to skip or circumvent online advertising altogether, a new, flexible advertising strategy called Real-Time Bidding (RTB) has emerged and is expected to become a significant part of the advertising landscape for years to come.

So if you’re looking to invest in online advertising but dread the process of chasing sales reps or developing proposals while still not sure your message is even reaching its intended audience, consider a direct real-time approach, one that gives you instant control of where your ads will be seen and best received.

As the Facebook IPO disaster continues I can’t help but think that the entire social networking house of cards has been built on a failing advertising model, one where companies looking to purchase ad space pay as veritable shots in the dark, hoping their online pop-up ads reach someone, somewhere who is receptive enough to click for more info. But such receptivity, even among a target audience, is quite rare, with ads reaching their target audience less than 1 percent of the time, with only 1 percent of those people actually clicking on them.

In fact, one of the greatest challenges for online advertising has been matching consumers with appropriate advertising content. Traditionally companies looking to buy advertising purchase large advertising blocks through ad networks, with the buyer paying these networks to spam the advertising across said network, with the understanding that a portion of those ads will not reach the intended demographic. With such ‘blind-buys,’ the ad buyer has no control over the placement of the ad, and thus its effectiveness can vary greatly.

But with the development of RTB advertising ad buyers and sellers now have a better option. As E-Commerce Times writer Heather Way explains, “RTB…describes the automated process of buying and selling online display advertising in real time, and it incorporates enhanced solutions in targeting algorithms and data analytics in order to deliver better targeting, greater control and more granular campaigns.”

Simply put, RTB is an auction-based model that allows buyers to purchase individual ad impressions, instead of large blocks, allowing companies to tweak their online advertising in real-time, leading to better audience targeting, more ad campaign control, and improved return on advertising spending.

While privacy concerns revolving around using personal information to fuel targeted advertising still exist, studies have found that most people don’t companies like Facebook collecting said information for advertising purposes if those advertisements deliver something of value (instead of spamming ads for menopause and American debt-relief) and this ‘value’ may just be something RTB can provide.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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How to Measure Internet Advertising Effectiveness | Brandy & The Gang
October 16, 2012 at 4:31 am

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