Real-time Media Buying in 2021

Advertising is one of the key revenue drivers for business. A deep understanding of the ad space and awareness of the industry’s processes is what usually creates the gap between success and failure. The internet ad field is growing steadily with a 16% revenue increase in 2019. And it’s securing a larger piece of the global advertisement pie each year. Keeping up with this media buying trend is crucial to surviving in the ever-evolving internet business. Another media buying trend shows rapid movement towards automation through Advertising Platforms. But first things first!

How does media buying work?

Media buying is a complicated field. In simple terms, it stands for buying space for a particular ad in a newspaper, TV program, website, or any other media platform. Ultimately, a media buyer connects an advertisement with its target audience to make that ad effective. This work also implies media planning, understanding of user preferences, negotiating with ad inventory owners, accounting for expenditures within strict budgets, tracking campaign performances, and dozens of other processes. 

Like anywhere else, buying media manually comes with obvious restrictions. To begin with, it’s hard to control everything manually. And the more responsibilities an operator has, the more room for human error there will be. Plus, manual processes take much more time, are less precise and are generally precarious. Luckily, media buying companies can automate most of these processes to achieve higher business objectives. Through real-time bidding and Advertising Platforms, we can make that happen.

Automated media buying: Real-Time Bidding

How do you determine the best buyer for a particular asset? By running an auction! Just like financial markets, media buying platforms are operated through programmatic auctions. On real-time bidding (RTB) markets, ads are almost instantly sold to a highest bidder, making it possible to run multiple campaigns simultaneously. Another advantage of real-time bidding is the ability to buy and sell ad inventory on a per-impression basis, instead of a bundle basis when ads are sold ‘in bulk’. This way of marketing ads is more profitable, precise, and reliable for both advertiser and publisher parties. 

Let’s have a look at how this works from a first-person perspective. When a user visits a website, a trigger launches a request filled with user-specific information like his location and browsing preferences to retrieve a relevant advertisement from a network. Momentarily, this request gets to an ad exchange marketplace, where advertisers compete to place their ads for that user. Since auctions perform automatically, advertisers set their maximum bids, target user data, and desired display volumes in advance using trading desks. 

Automated media buying: Demand Side Platforms

DSPs are essentially the entry tickets to RTB. Through a DSP interface, advertisers participate in the ad exchange ecosystem. The main purpose of a DSP as a mediator is to buy ad placement at the most favorable rate in accordance with target user guidelines. Technically, a DSP acts as a marketing agency that buys an audience instead of specific ad space. 

Demand Side Platforms are the operators that run trading between the advertiser and publisher (SSP) sides of the market. It negotiates bids, trying to purchase with the most profitable terms, exchanges data with various platforms, and cooperates with other RTB participants. A platform then analyzes pre-loaded information and preferences, compares that with the available offers, and picks up the most fitting deals. All this takes a few milliseconds as the web page loads.

DSP media buying platforms carry the following benefits:

  • Work speed. As the RTB name suggests, all requests are processed in real-time and near-instantaneously. 
  • Wide targeting options. Demographics, behavioral characteristics, interests, geographics, and other parameters can be used. 
  • Definitive reports. DSP can generate precise reports for each display, reflecting the results of its performance. 
  • Statistical data. Advertisers can track the performance of their campaigns live to quickly redirect resources towards effective spending and mitigate losses from gainless traffic sources. 
  • Cooperation with third-party DSPs. DSPs exchange ad requests between one another for mutual benefit. This exponentially increases media coverage. 

All these benefits and functions are wrapped in a single interface, giving advertisers the unique ability to control ad campaigns with unprecedented traction and precision.

Dorian Koci