Real-Time Bidding
There’s growing buzz in the internet advertising community about “real time bidding”, but it’s still a new concept to many. We plan to be a part of the industry’s ongoing dialogue on the topic, so we’d like to include a brief introduction to real-time bidding here. It will also be a frequent topic in the DataXu blog.
Real-time bidding is at the core of DataXu’s technology platform, because we believe that its potential to deliver dramatic efficiency gains for advertisers is truly significant.
Most advertisers are familiar with the first generation of ad exchanges, which have operated for several years with a “static” bidding model. This approach allows an advertiser to list a bid price and buy impressions by the thousand that meet the bid. Although the bidding itself can happen in real-time, advertisers are essentially buying in bulk, with no opportunity to determine which impressions have the best—or worst—potential among the group.
The new generation of ad exchanges enables true real-time bidding at the impression level. Here are a few of the key differences to consider:
| Static Bidding | Real-Time Bidding | |
| Pricing & Bidding | Flat-rate auction pricing per 1,000 impressions, entered in advance as bulk orders. | Dynamic auction pricing per individual impression, enabled by bids entered in real-time, on an impression-by-impression basis. |
| Targeting | Selection of impression “buckets” based on coarse targeting parameters. | Selection of individual impressions based on customized narrow targeting parameters. |
| Efficiency | Limited by bulk pricing, bulk targeting, and bulk estimation of value. | Enhanced by impression-by-impression pricing, precise targeting, and impression-by-impression valuation. |
Many have compared these new advances in display ad management to the efficiency and transparency of search advertising, but its potential for targeting and optimization go beyond even search’s capabilities. That’s where DataXu comes in. Only DataXu can synthesize all of the data describing the purchase opportunity – including data describing the context, consumer and creative — and manage the bidding in real time, for campaigns of any scale. DataXu gives buyers the control in selecting and targeting the right impressions, by creating customized algorithms for each campaign, rather than relying on the targeting algorithms of the exchanges, which only offer high-level targeting by region, time, or broad content category.
Learn more about DataXu’s platform and benefits to advertisers.
