Some of the best things in life, such as your home, lobster, diamonds, are bought and sold at market price. These market prices are primarily driven by supply and demand. The same principles of supply and demand pricing are now applicable to your ideal inventory source and every impression.
While you’re nodding and thinking , “How does this save me big money?”, let’s cut to the solution: Real-time bidding (RTB). Before you cringe, understand that real-time bidding has evolved and is not just for inventory table scraps. Premium publishers, as well standard publishers are making their inventory available to buyers in a biddable fashion. Why? Because it’s beneficial for the sellers and buyers alike.
The mechanics of this win-win solution are simple. Publishers make their inventory available to buyers who want to pay the fair market price. The impression is then sold to the highest bidder. Value is in the eye of the beholder. Not every marketer has the same target audience so the value of the publisher’s impression changes based on demand. Buyers, as well as, sellers are using technology to impel RTB and derive the proper value of an impression in real-time. This offers yield optimization opportunities for sellers and rate efficiency for buyers.
As a buyer, to start saving money in a big way, you will need technology to enact the RTB strategy. This technology is known as a Demand Side Platform (DSP). The industry’s leading DSP is DoubleClick Bid Manager by Google, and it is the most trusted and utilized DSP worldwide. In comparison to other DSPs, DoubleClick Bid Manager (DBM) provides marketers transparency and superior inventory access via its direct connection and compatibility with the most prominent publisher ad server:DoubleClick for Publishers. Additionally, the breadth of premium inventory and ability to buy advertising space the millisecond it becomes available, are other contributing factors to DoubleClick Bid Manager’s pole position.
Whereas in the past, paying a flat, fixed fee for all impressions was the only option, but now the revolution of real-time bidding introduces a dynamic pricing model where you only pay the current value for the exact desired impressions. This dynamic pricing model is known as variable cost per thousand (vCPM). VCPM is the primary contributing factor to your mega savings. With a better understanding of the solution and the landscape, let’s pivot to a simple savings scenario:
- A men’s fitness apparel advertiser wants to reach male sports enthusiasts.
- Last quarter, they spent $100k with a sports publisher at a fixed CPM rate of $10, yielding 10,000,000 impressions.
- Understanding that not every impression across the publisher’s site holds the same value at all times, they decide to utilize RTB for the next campaign.
- Instead of a fixed rate, they enact dynamic pricing, where the vCPM averages out to $7.
- The campaign reaches the 10,000,000 impressions goal with $70k of media budget, saving the advertiser 30% of their working media ad spend.
As you are aware, not all video or display impressions are created equal, so decide today that you will stop buying them as such. Instead, choose the route of money savings and efficiency gains by embracing RTB for the majority of your digital ad spend. What will you do with your surplus of savings? Expand your reach by putting the savings into working media? Hire a new full-time employee? With real-time bidding the possibilities are endless.