Real-time adver­tis­ing (RTA) has swept across the dig­i­tal indus­try at a vora­cious speed. It has snagged around 28 per­cent of total UK dis­play ad spend in the last year, accord­ing to the lat­est IAB audit. This is pre­dict­ed to almost dou­ble in the next 6 months.

RTA has its strengths and lim­i­ta­tions. Here’s what CMOs need to know about RTA.

What Is Real Time Advertising?

RTA involves bid­ding on inven­to­ry or ad oppor­tu­ni­ties in real time to show one ad to one per­son based on spe­cif­ic tar­get­ing cri­te­ria.

Real-time bid­ding (RTB) is the cor­ner­stone of RTA. It works like an auc­tion where ads are bought and sold in mar­ket­places.

To break it down, when a con­sumer is look­ing at a web­site and an ad space becomes avail­able, the web­site own­er puts this space into the ad mar­ket­place via a Sup­ply Side Plat­form (SSP). Then, a host of adver­tis­ers can bid on this space via a Demand Side Plat­form (DSP). Bil­lions of these impres­sions are processed in mil­lisec­onds, hence the term real-time adver­tis­ing.

CMO Need-To-Know Num­ber 1: RTA is grow­ing expo­nen­tial­ly faster than any oth­er adver­tis­ing type and is essen­tial addi­tion to any media plan.

Why Is RTA Effective?

RTA is effec­tive because it:

• Gives mar­keters a great oppor­tu­ni­ty to only pay for indi­vid­ual and high­ly tar­get­ed ads shown to con­sumers that are most like­ly to con­vert.
• Gives mar­keters access to an inven­to­ry pool drawn from hun­dreds of thou­sands of web­sites.
• Man­ages more data points, such as demo­graph­ic data, behav­ioral data, first- and third-par­ty data to make deci­sions in real time about which con­sumers to show ads to.
• Allows mar­keters to ana­lyze the small dif­fer­ences of high­ly effec­tive con­sumer seg­ments and scale the most effec­tive ones.
• Helps mar­keters to achieve high ROI with the best results at the low­est costs.
• Makes use of machine learn­ing and looka­like mod­el­ing so that the tech­nol­o­gy can source cus­tomers that have not been seen yet but are like­ly to con­vert.

CMO Need-To-Know Num­ber 2: RTA achieves a 6x high­er ROI than bulk media buys where gener­ic ads are shown to broad web­site audi­ences.

When Should You Use RTA?

RTA can be used across all stages of the fun­nel for brand aware­ness, con­sid­er­a­tion, and pur­chase intent.

Mar­keters can opti­mize cam­paigns toward a sin­gle goal (e.g., clicks or con­ver­sions), but also man­age more com­plex goals (e.g., repeat con­ver­sions or up-sell­ing or cross-sell­ing). Mar­ket­ing across every stage of the fun­nel makes it pos­si­ble to jug­gle a dozen attri­bu­tion mod­els and gain real-time insight into which are most effec­tive.

For top of the fun­nel cam­paigns, mar­keters can run con­tex­tu­al cam­paigns and rel­a­tive­ly low cost to reach a broad audi­ence. Mid-fun­nel cam­paigns can make use of machine learn­ing, behav­ioral or third-par­ty data to attract con­sumers who are like­ly to con­vert. Bot­tom of the fun­nel cam­paigns can use retar­get­ing or dynam­ic cre­ative opti­miza­tion to con­vert cus­tomers who are most con­ver­sion ready.

CMO Need-To-Know Num­ber 3: RTA can improve every stage of the mar­ket­ing fun­nel, but it isn’t a sil­ver bul­let. Mar­keters should still have an under­stand­ing of their attri­bu­tion mod­els.

How Can You Get The Most From RTA?

If you’re con­sid­er­ing buy­ing adver­tis­ing in real time, it’s impor­tant to part­ner with a demand plat­form with pro­pri­etary tech that is able to not only bid on the right inven­to­ry but also machine learn from your cam­paigns and source looka­likes of your cus­tomers.

Brand safe­ty has come up as a con­cern for RTA because there is a much wider scope of sites in which an ad can appear on. Ensure that your demand part­ner restricts all inap­pro­pri­ate con­tent and gives you the abil­i­ty to white list favor­able sites or black list sites if need be.

RTA dri­ves down adver­tis­ing costs and some demand plat­forms have used a black box or arbi­trage pric­ing mod­el to achieve ridicu­lous prof­it mar­gins. They do this by charg­ing a flat rate or CPM and bid­ding on much cheap­er inven­to­ry. Mar­keters should always know exact­ly how much of their spend is going to media, tech and ad-serv­ing costs.

CMO Need-To-Know Num­ber 4: Not all demand-side plat­forms are equal. Empow­er your­self with bid­ding plat­forms that have pro­pri­etary tech­nol­o­gy, brand safe­ty, and trans­par­ent item­ized billing.