Programmatic v/s RTB: A Closer Look

Many a time, we see the terms ‘real time bidding’ and ‘programmatic’ used interchangeably. Marketers out there believe that these two are nothing but the same but that’s really not the case. The two terms are completely different from each other as we shall see in this blog. We are missing out on huge advertising opportunities if we believe that RTB and programmatic are nothing but same. True, they belong to the same concept of automation, but there is a wide difference between the two.

What is RTB (Real Time Bidding)

Real time bidding as the name suggest can be compared to the likes of an auction or a stock market. To put it simply, RTB is marketplace or an auction for purchasing and selling ad impressions in real time. The concept revolves around the basics of demand and supply. The publishers or the sellers make their ad inventory available for advertisers to bid on. The advertisers have their own set of criteria and based on them, they select the ads using RTB.

Ad impressions are what drive revenues in the digital ad world. With RTB, one can ensure that every ad impression can be evaluated, bought or sold. Since RTB is based on humungous amount of data, there is a measurable aspect to it, which makes it accurate. RTB makes sure that the right kind of ad is showed to the right audience at appropriate times.

This means, it is cost effective and optimized in a way to generate maximum conversions and thereby revenue. No longer, ads are randomly shown to users. The algorithm ensures that the right ad is shown to the relevant person, and this is done through consumer data, making RTB an effective channel to release ads.

RTB offers great benefits to both publishers and advertisers. For advertisers, it is a gold mine because now, advertisers can access huge ad inventory in a streamlined manner and that too deal in transparent pricing mechanism. According to the IDC, real-time bided display advertising will accelerate at a 59% compound annual growth rate through 2016 with global spending to reach an estimated $13.9 billion.

Publishers are also gaining advantage through RTB because this particular technology frees up resources to do more effective operations. With no manual input required, publishers can use their resources for better jobs that are directly related to revenue generations.

Now, publishers need not spend huge sums of money on request for proposals or other documentation work, making overhead cost minimal. With RTB, publishers can easily monetize their inventory. Publishers no more need to deal with complicated negotiations or multiple partners to reach out to the best advertisers.

With RTB in place, they can quickly reach the best advertisers. RTB is all about automation, which further means cutting down of unnecessary human intervention. With streamlined processes in place, advertisers and publishers can make the most of every penny.

What is Programmatic?

Now that we know what RTB is, let’s understand how it is different from programmatic. To put it in plain words, RTB is a tool in the programmatic world. Programmatic is that universe that encompasses more than just RTB. Programmatic is large-scale automation that extends far beyond the buying and selling of online display inventory.

The digital world has large amounts of data points. You have data about where customers live, their day to day activities, their likes or dislikes, purchasing patterns and so much more. Programmatic encompasses the use of such valuable data to create targeting and optimization decisions. Programmatic technologies such as RTB allow you to make sense of these data by converting them into useful information, thus helping to take informed decisions at every step.

This is just the beginning of a Programmatic Solutions world. We will see many advanced programmatic technologies that will transform data into information, helping marketers-advertisers and publishers to create streamlined operations and undertake automate processes, to create real-time and tailored experience for each and every customer.