January 21, 2021
Mobile advertising is one of the best way for marketers to reach audiences in the 2020s.
That said, competition is high, the market is global, and advertisers must drive the highest possible return on ad spend to stay profitable. For these reasons, the industry increasingly leverages real-time bidding — mobile RTB — to acquire and convert the most valuable segments.
This article offers an in-depth overview of the real-time bidding ecosystem with resources marketers can use to leverage it effectively.
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Real-time bidding is the mechanism that enables programmatic media buying — the automated process of buying digital inventory. With programmatic buying, advertisers can target mobile users globally with a high degree of precision. Depending on your goals, these processes can improve efficiency and drive more ROAS than traditional media buying practices.
Advertisers can engage with the programmatic ecosystem in the following ways:
Real-time bidding (RTB) is the most popular form of programmatic media buying. It lets marketers skip past arranging direct deals with publishers by bidding on inventory in real-time online auctions. This format allows any advertiser to bid on impressions from a target audience directly. The rest of this article will explore the RTB process in more detail.
Filling programmatic inventory is usually an automated process, but direct deals still have value in this market. Advertisers can buy supply directly from publishers using a predetermined CPM value without relying on an auction. When an ad request aligns with an advertiser’s target audience, they automatically deliver the ad and gain the impression.
Private marketplaces are exchanges that are only available to select media partners. Gaining access usually requires an invitation from the marketplace or the ability to operate above a fixed eCPM benchmark. Private marketplaces are home to exclusive inventory that is not available on the public market and usually targets a high-value audience. Advertisers on a private marketplace can generally expect a high standard for brand safety.
To find out more about the programmatic ecosystem, read our guide “Programmatic Media Buying - What App Marketers Need to Know.”
While direct inventory deals and private marketplaces have their place, mobile RTB is the heart of the programmatic supply chain. Every day, innumerable publishers, advertisers, networks, ad exchanges, MMPs, and other participants participate in programmatic auctions that fill within a fraction of a second. Delivering the right advertisement to the right customer is a surprisingly complex task, made possible by specialized RTB software that serves each participant’s needs.
The Interactive Advertising Bureau (IAB) uses the following high-level classifications to define RTB platforms and active services currently active on the supply chain:
Core advertising technology refers to any foundational RTB software that is necessary to complete a programmatic transaction. These include demand-side platforms (DSP), supply-side platforms (SSP), and ad-serving services.
Management services are RTB software tools that help advertisers or publishers streamline their interactions with programmatic technology. Example platforms may feature account managers, bidding tools, automated reports, and other programmatic resources. These platforms are highly effective at helping small teams manage their programmatic inventory.
Audience addressability needs are tools that measure and evaluate ad impressions based on pre-assigned optimization goals. Platforms with these tools help marketers with audience targeting and segmentation needs. The most common examples are data management platforms (DMPs).
Inventory verification tools help marketers verify inventory quality and viewability. These software platforms are essential to counter brand safety risks and ad fraud in the fast-paced programmatic environment.
For specific examples of programmatic tools, from core technology to supplementary services, take a look at “RTB Software - How Does Real-Time Bidding Tech Actually Work?”
The mobile RTB process begins the moment a user activates an ad placement within the app interface. From there, the app requests an ad from the programmatic supply chain, usually triggering a flurry of bids from advertisers. These processes are fully automated, delivering ad spend to publishers and ad creative to users in the blink of an eye.
To understand how RTB bidding works, we must take a closer look at these automated platforms and how they serve each participant:
A DSP is a core advertising technology that lets media buyers access the programmatic supply chain to acquire ad inventory. Their primary purpose is enabling marketers to take part in RTB auctions, but they typically include additional tools for campaign reporting and optimization.
Looking for a DSP? Moloco's machine learning capabilities are unrivaled throughout the industry. We provide both self-serve and managed service options to power growth at any scale. Reach out to our team for a consultation.
An SSP is a core advertising technology that lets digital media owners sell their inventory programmatically. These platforms process incoming ad requests from apps and deliver ad creative back to the end-user. SSPs often resolve deals using RTB auctions, but publishers can opt to manage direct contracts as needed.
Ad exchanges are automated online marketplaces that list programmatic inventory from supply partners. Exchanges drive the programmatic ecosystem by selling inventory to DSPs through RTB auctions. They can also act as a channel for publishers and advertisers to implement direct deals while operating in the supply chain.
A data management platform is an audience addressability needs tool that stores supplemental data. They are most commonly used to aggregate and normalize data sets for campaign analysis and performance reporting. Advertisers can also use some DMPs to serve ad creative to the specific end users.
Mobile ad networks are intermediaries that sell inventory on behalf of publishers during the ad buying process. Unlike ad exchanges, these platforms are not usually programmatic. Instead, they are SDK-based. Publishers install one or more network’s SDK and distribute inventory through a mediation process. Waterfall mediation prioritizes ad networks by historical eCPM, while programmatic mediation — or in-app bidding — allows publishers to host real-time auctions within the app. This model proves more efficient, but many publishers implement hybrid models that combine waterfalls and RTB in some form.
To find out more about how RTB software interacts with the programmatic supply chain, read our complete guide, “DSP vs. SSP: Understanding the Advertising Supply Chain.”
To succeed in the RTB marketplace, advertisers need a partner who can leverage the right data insights that drive ad performance. At MOLOCO, we use proprietary machine learning technology to drive user acquisition, mobile retargeting, and programmatic advertising campaigns that drive the highest possible ROAS. Our DSP is rated in the Top 10 of Appsflyer’s Performance Index and is the #1 DSP in the North American growth chart. When you’re ready to dive into the RTB ecosystem, get in touch with Moloco today.
By looking at spending trends stretching as far back as 2020, we can begin to understand how the industry has evolved so far and what to potentially expect for the rest of the year and beyond.
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