What is Real-Time Bidding (RTB)? (And Five More Terms to Know) – Digital Nugget #7

Sep. 07, 2015 // Jeff Cracolici

When it comes to the process of buying and placing digital ads, there are several key terms and concepts to know.

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What are Digital Adversiting Auctions?

For Search Engine Marketing (SEM) platforms and some Advertising Networks, the placement of ads are usually determined in an open market that is predicated on bidding advertisers against each other. The concept is simple: if an advertiser wants their ad to appear in a preferable place, they must be willing to out-pay the other advertisers.

The are two types of auctions: Static, which advertisers bid for thousands of impressions at a time, or Real-Time Bidding.

What is Real-Time Bidding (RTB)?

Real-Time Bidding are auctions controlled by machines that go through the bidding process for every single impression. These auctions, which are completed in nanoseconds, give advertisers more opportunities to display their ads because there are more opportunities to out-bid other potential advertisers.

What is Programmatic Media?

Refers to any platform or technology that is used to automate any of all of the decision-making processes behind the buying, the placing, or the optimization of ads. These decisions are based off of algorithms and/or business rules.

Real-Time Bidding is an example of programmatic media.

What is Premium Ad Inventory?

Highly desired ad spaces on a publisher’s website. While the demand for such ad spaces could be based on various specifications, typically, ads that are considered “Premium Inventory” occupy spaces that appear towards the top of highly trafficked web pages.

While these Premium Inventory ads could be bought programmatically, a publisher may opt to have their sales force sell them directly to advertisers. Depending on the popularity of the website, publishers can usually fetch more advertising revenue for these highly coveted spots outside the programmatic realm.

What is an Agency Trading Desk?

A centralized department within a digital ad agency that oversees everything that falls under the label Programmatic. All the major agency holding companies have trading desks.