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Real Time Bidding explained – an insight in the term and abbreviation jungle

RTB is probably one of the most used acronyms in the online marketing world of last year. Almost everybody knows by now what these three letters mean – real time bidding. However, this is not the only widely used abbreviation in this context. A real term and abbreviation jungle has developed itself around this topic. To provide a better insight – and to prepare for future blog entries about this matter – the most important terms will be explained in the following text.

Find a way through the abbreviation jungle

Find a way through the abbreviation jungle

As anywhere on the display advertising market the transaction includes the demand side as well as the sell side. In the last years various companies and technologies arose on the demand side in connection with RTB that tackle particularly the needs of the demand side: media buying. Provider of so-called demand side platforms (DSP) make media buying for advertisers and agencies through different inventory sources possible, such as ad exchanges, sell side platforms (SSPs), ad networks as well as separate attached websites and portals.

Advantages of this bundled purchase are primarily simplified processes, integrated reporting, better and notably automated optimization mechanisms plus the possibility to buy inventory in the RTB process. The intelligence of the RTB purchase lies in the DSPs, the so-called real time bidder.

The Real-Time Bidder defines the bidding strategy. This means it will be decided if or if not a bid will be placed for the displayed impression. If you decide to place a bid you need to fathom which campaign is the most suited, and based on the projected performance, and estimated market value, what the optimal price is for it.

Real Time Bidding Strategy

Real Time Bidding Strategy

Ad exchanges such as Google’s Doubleclick AdExchange or Rightmedia present themselves as more or less neutral connecting links between the demand side and the sell side. Their task is to mediate advertising spaces between the two sides. For this reason the technical platform was made available to make automated trade for buyer and seller possible. The transaction is always effected via the auction principle, with a sharply increasing proportion of impressions, via RTB.

On the publisher’s side there are the so-called sell side platforms, short SSPs. They offer publishers the possibility to optimally manage their inventory and to maximize their advertising revenue via the technological platforms. Publishers have therefore the opportunity to tie and to manage via one platform the different participants on the demand side. Moreover, they ensure that the available impressions will end up where they will generate the highest eCPM. Additionally, under certain circumstances the platforms can protect the offered inventory with a blacklist and automated filter mechanisms from undesired campaigns, categorize the inventory or enrich it with data of third party suppliers.

According to a recent study by Forrester, AppNexus and Admeld, PubMatic and Rubicon Project are the leading SSP players in this sector.

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