Follow
UpFront/Briefing | Feb 27, 2012 | 6765 views

New Rules Of Online Advertising

Real Time Bidding is a fast rising ad technology that is transparent and efficient. It is also changing the ground rules of online advertising

T

here's an old saying about newspapers: They aren’t delivering news to readers, but readers to advertisers.

But as many newspapers migrated to the web, where readers, in most cases, hate to pay for news at all, the saying evolved to: If you’re not paying for it, you’re the product.

Dismal as it may sound, most people realise that is the way the media business operates. Readers rarely pay full or fair price for content—at least in the opinion of publishers—so bombarding them with targeted ads was the best way to make up for the shortfall.

But unlike search advertising (the ads you see on search engines) where ads have been tailored for individuals for years now, display advertising (the ads you see on web pages) has mostly been about showing the same ad to a bunch of users. Meaning, if you visit the website of, say, Times of India, you will see the same ads as the visitor immediately before or after you.

mg_63918_real_time_bidding_280x210.jpg


Of course, the ads might be different depending on the page you visit. The ads on the home page and other highly read ones—termed “premium pages”—are usually sold in bulk and at a premium by the publisher’s in-house ad sales team. Ads on other pages are sold in lots of thousands (Cost Per Thousand, or CPM) through third party ad exchanges.

Nevertheless, the common thread across both categories is the bunching together and targeting of thousands of different users at a time.

But a fast rising ad technology called “Real Time Bidding” is changing all that by allowing advertisers and publishers to transact with each other for every single ad impression!

Line Your Bids!
The first time you hear how real time bidding works, it seems almost impossible.

A user heads to a page on a publisher’s website, causing it to start loading. In the same instant the publisher sends out a “bid request” to tens of hundreds of potential advertisers saying, “We’ve got this user who is 30, Indian, male and based in New Jersey, US, and recently searched for return air tickets to Delhi, opening a page on our site. How much are you willing to bid for being the only ad on this page?”

Within about 100 milliseconds the publisher gets bids from different advertisers, which it then analyses to figure out the highest bidder and the brands being advertised. The winner is alerted by the publisher and allowed to place its ad on the page.

This article appeared in the Forbes India magazine issue of 02 March, 2012
Next Article in Briefing
Like this article? Subscribe to Forbes India
Just give us your mobile number and we will get in touch with you
Post Your Comment
Name
Required
Email Address
Required, will not be published
Comment
All comments are moderated
 
Comments (1)
Marietta Jan 25, 2013
Hi, this is very interesting. What is the reference - Billion US-Dollar?
Most Popular
Insta-Subscribe to
Forbes India Magazine
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR
click here to Subscribe Online