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Digital advertising today: Real time bidding, ad exchanges and demand-side platforms for the rest of us

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Due to advancements in technology, billions of people have instant access to the Internet. This could be either from mobile devices in their pockets or their desktop computer system sitting at home. As the competition for attracting visitors to a website is fierce, effective marketing strategies need to be developed. In the past, ads were merely shared across a network in the hopes a visitor would click on the provided link. Today, display impressions are controlled in a much different manner while being able to target visitors by habits and location.

Past Problems with Display Impressions

When display marketing began making strides in the early 2000s, businesses were purchasing ad impressions from various companies. These were usually a flat rate for all customers regardless of the network. One of the biggest problems with this platform was the generalized targeting of the ad itself. Too often, these advertisements were shown to those who may not have had any interest in the product.

As technology and techniques for online marketing evolve regularly, ads are now capable of targeting based on the specific visitor’s demographics as well as the individual’s viewing habits and geographic location. This makes for a far more efficient method of delivering ads to those that are more likely to click or visit the business displaying the advertisement. This works for both online commerce as well as localized sales within a community.

Real Time Bidding: What it Means to Users

Real time bidding, or RTB, allows ads to be purchased by an advertiser using an auction-type pricing scheme for a specified target audience. This means that ads are displayed to those who are more likely to visit the advertiser based on a split-second bidding system.

Properly using RTB as an ad buying technology may deliver fewer wasted impressions and more ad revenue while effectively targeting specific visitors. Publishers are paid the right amount for ad inventory based on demand, as opposed to the traditional universal cost-per-impression which can often be devalued. And, visitors to websites and mobile apps may see more relevant advertising that is meant specifically for them.

What the Demand-side Platform Does for Businesses

The Demand-side Platform, or DSP, has been likened to a stock trading desk. It is management software that allows businesses to place ads to display on an incredibly large network of websites. This software provides in-depth analysis of ad performance allowing users to determine the efficiency of specific ads across certain categories. In most cases, the DSP offers a vast array of websites and other supplying networks for businesses to display ads.

The DSP acts like a centralized supplier of ad inventory. Other organizations, called supply-side platforms, use the DSP to access ads that are most likely to be beneficial for both publisher and advertiser. As transactions happen almost instantly, a website can pull an ad from the DSP through the supply-side organization to display on any given webpage.

What is an Ad Exchange and How Does it Affect Businesses?

An ad exchange is a service that incorporates RTB (real-time bidding) and a DSP (demand-side platform) so advertisers and publishers are able to buy and sell advertising space across billions of available impressions offered on thousands of websites and mobile apps. These exchange networks are often used when users browse the Internet on mobile devices, play video on streaming sites, or use apps on smartphones. Ads that are displayed in this fashion more than likely came from a kind of ad exchange network.

Developing Efficiency Through the Data

One of the most profound attributes that come with advertising in this manner is the capacity to collect large amounts of data pertaining to campaigns. This data can be used to fine tune the ads while delivering details about the effectiveness of bids. Using this information, businesses are able to adjust the marketing campaign quickly to maximize the solution, committing changes almost immediately. It’s this aspect that many professionals find more alluring than that of many other forms of marketing strategies.

Display Advertising is Here to Stay

Billions of ads are processed through the Internet on a daily basis. Given the plethora of opportunities for display advertising, it’s a method that shows no sign of becoming obsolete. As it’s in a constant state of evolution while keeping up with site trends and technologies, many speculate that it can only get more efficient and cost-effective in promoting business services and products.