Difference between Programmatic Advertising and RTB
Programmatic is a fast-growing part of buying and selling media used by people to categorize everything from behavioral and intent-based targeting to real-time bidding. According to ZenithOptimedia Marketing Forecasts, it will increase to shocking 31% as compared to other digital channels, will account for 51% of expenditure and will eventually rise to 58% expenditure in 2017.
We have seen people getting confused over Programmatic and Real-time bidding terms so, in today’s post, we will discuss how these two are different and how RTB is a subset of other.
According to marketer Report, Programmatic Advertising has become the preferred way of buying and selling digital display ads in the US, with advertisers expending about $25.23 billion or 73% of their total digital display ad budgets.
It uses technology to automate buying ad-impression instead of doing it manually and ad-placement in digital media. So, it takes different points and data on which it makes a decision about what web page an ad should be or is more relevant and what is the most effective strategy.
Since it automates the whole process eliminating middleman or salesperson it is cheap and more efficient than manual way of media buying by reducing human error. It helps in creating more better-sophisticated strategies, get better analysis in a campaign and keep up with industry shifts.
Let’s understand what is RTB?
RTB is a technological solution for addressing the vast fragmentation of digital media.
So, RTB or real-time bidding lets you buy or sell an ad impression in the virtual auction that occurs during the Page-load time of web browser. While the impression loads in the Users web-browser, user information is received by advertisers, from which the interested advertisers start the bidding process. These auctions are facilitated by ad-exchange or supply-side platforms.
Advertisers compete in the RTB for an impression or ad space on a web page, with automated bids. After auction, the highest bidder wins the auction placing his ad on the web page immediately. RTB is adopted as a part of marketer’s programmatic solution. It allows advertisers to buy ad impression from the publishers in a virtual auction-based system with the machine making decisions in a millisecond./span>
With RTB, a buyer can set parameters such as bid price and network reach as well as enables specific targeting, since information about the user and user’s browsing is communicated in real-time from browser to an ad exchange which directly reflects on the outcome of the auction.
So, a general question arises, Are these two technologies Same?
Not exactly. Programmatic is a method or information tool that helps the advertisers decide if they are willing to purchase inventory space whereas RTB is one way to purchase it. So, we can say that RTB is a type of programmatic advertising, but not all Programmatic advertising uses RTB, which means advertisers can use programmatic without using RTB i.e without utilizing RTB.
These technologies were perceived slowly by the Publishers and Advertisers as compared to their preferred method of buying ad space. Early, Advertisers feared these systems would compromise the quality of advertising on their website but it neither had an effect on quality of ad nor on the website.
These technologies also came with their own challenges i.e. they had to be tweaked and modified along the way. Since these two works in partnership between both Publisher (Buying Side) and Advertisers (Selling side), the technology should be modified and ready for exchange.
To gain more market and increase their ad revenue, industries are investigating more benefits of these two technologies as a mean of selling their ad-inventory to advertisers. Looking at the efficiency of the programmatic, big-name companies said that they will go 100% on this technology in the future.