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RTB Video Advertising 101: Challenges and Opportunities for Today’s Marketer

RTB Video Advertising 101: Challenges and Opportunities for Today’s Marketer

May 04, 2016

It’s pretty well known at this point that video marketing is on a sharp and momentous upward trend. It’s estimated that by 2018, about 69 percent of all Internet traffic will be video related. With billions of views in the balance, marketers and advertisers are hungry for a piece of the action, producing new forms of video content and video ads to take advantage of the heavy traffic. 

But our existing forms of video advertising aren’t quite enough. We’ve made some major strides toward greater cost efficiency and better user engagement in recent years, but the industry keeps moving forward by necessity, keeping up with ever-increasing user expectations. One of the latest advancements in online ads has been real-time bidding, or RTB advertising, which allows advertisers to bid for ad space in real-time on a per-impression basis. If you have any kind of online marketing strategy involving video, you need to be aware of the advantages, challenges, and opportunities that RTB advertising presents.

RTB Advertising in a Nutshell

Before we dig into the details, you have to know what RTB advertising actually is. The simple version is this: RTB advertising is the process of buying and selling ads through a digital marketplace in the milliseconds it takes for a page to load on an end-user’s device. These ads are bought and sold on a per-impression rate, making them similar to other forms of advertising, but the process itself is far more efficient. 

One of the biggest variables for this advertising network is user information. When an end-user makes the page request, the ad exchange receives information such as the user’s web history or demographic information. This helps ad buyers determine how much they’re willing to pay for the ad. This happens in an auction-style process that unfolds in milliseconds. All “maximum bids” and budgets are set beforehand by the advertisers. The highest bidder “wins” the advertising opportunity, and their ad is displayed in the user’s browser.

RTB is a type of programmatic advertising, which allows publishers to sell ads in advance for a fixed price in addition to the auction-style format associated with RTB. 

RTB Platforms: Supply-Side and Demand-Side

Both supply-side and demand-side RTB advertising platforms exist. Demand-side platforms are more common, and are directed toward ad buyers. A DSP helps advertisers by streamlining the available ad impression opportunities, and presenting a relatively easy interface for advertisers to control the budgeting and buying process. Analytics and reporting may also be offered by the DSP.

Supply-side platforms, on the other hand, serve large publishers who need to manage advertising costs and yields on their sites. 

Opportunities and Advantages over Traditional Advertising Methods

At a glance, this may not seem like much of an improvement over traditional video advertising methods. However, consider the opportunities and advantages available here:

  • Advertising caters to a user, not a site. All advertising should cater to individual users, but old styles of advertising relied on serving ads via a website. For example, if you sold apparel, you might place an ad on a fashion blog, knowing most visitors would be interested in fashion. RTB lets you drill down to the individual user, customizing your spend and approach accordingly.
  • Higher reliability. Most older forms of advertising relied on human ad buyers to manage costs and execution. After establishing some initial parameters, RTB advertising is completely autonomous, so you can walk away with a higher degree of reliability.
  • Access to a wider range of publishers. Rather than being forced to work with publishers one at a time, most ad exchanges give you access to a wide range of different publishers and applications, giving you the ability to maximize your potential return (and reach a more diverse audience).
  • Maximized value per impression. With more refined variables on both an audience level and a cost level, you’ll end up earning more value for every impression you serve. That means more profitable online advertising campaigns.
  • Better reporting and analytics. Though this depends on your DSP of choice, most RTB platforms give you advanced insights on your performance and the behaviors of your demographics.

Challenges of RTB Video Advertising

There are also some key challenges associated with RTB video advertising:

  • Browser data is harder to find on mobile. Video accounts for 55 percent of mobile traffic, and it’s quickly replaced desktop as the most common platform for Internet access. However, thanks to technical difficulties, it’s much harder to find browser information on mobile devices, complicating the traditional RTB process.
  • There’s no universal cookie alternative on mobile. In a similar vein, there’s no universal cookie alternative for mobile devices, making it even more difficult to draw information.
  • Publishers feel taken advantage of. Auction formats and selective publication have had publishers worried that they’ll make less money for every impression served. This is a real and legitimate fear; however, RTB platforms are evolving to make sure publishers remain profitable while still riding the popularity of the advertising method. For example, some ad exchanges have introduced “pricing floors,” which function as a kind of minimum bid to guarantee some fixed return.

Key Takeaways

If you’re looking for a brief summary, it’s this: RTB video advertising is a new way to serve ads, based on specific user information and optimized for cost efficiency. If you’re in the online video advertising market and you’re still relying on human-based exchanges with publishers or fixed-price advertising, you should at least give this new method a shot. With more focused user targeting and better analytics, you’ll at least walk away with a better cost efficiency for your ad campaign, and probably better user engagement rates at the same time. There are some challenges holding RTB back from its full potential, but like any other advertising technology, it’s always evolving.

If you’re interested in getting started with an RTB online advertising campaign, or if you’re just interested in learning more, contact us today! We’ll put you in touch with one of our expert team members to get you all the information and direction you need.