Banner Advertising Purchasing: Real Time Bidding (RTB) VS. Direct Buying

Posted on Aug 21, 2014

What is Real Time Bidding?

Often referred as “programmatic banner buying,” real time bidding is the process of bidding on a publisher’s impression in real time. The impression goes to the highest bidder.

• Real time bidding allows advertisers to maximize their budget by bidding in multiple networks. The CPM for every single impression varies, thus creating cost effective reach and frequency.
• Enhanced targeting capabilities via demographics.

• The simple nature of a publisher using networks to fill ad inventory creates a risk of adding too many ad spaces for easily gained revenue. There is a balance of maximizing ad revenue and maintaining the integrity of the publication. RTB tends to tip the scale towards ad clutter as revenue is so easily obtained.
• RTB does not evaluate brand awareness very well. The RTB network doesn’t quantify if the ad being served suits the timing and the placement on the publication.

• Here is an example of poor placement:


What is Direct Buying?
Direct Buying is the process of negotiating directly with the publisher for the best CPMs. There is a human element to direct buying as you often deal with a sales rep to place an order as opposed to logging onto a system to purchase from a network.

• Buying impressions directly from a publisher creates relationships that often benefit the advertiser.
• Ad content created to suit the environment of the individual publisher results in richer engagement and potentially better performance.

• Implementation of creative and targeting goals takes time to set up.
• CPMs tend to be higher with direct buying.

While speaking with advertisers, the most common phrase I hear is “bang for my buck.” Typically this means most impressions for a given budget. While this gives the advertiser more reach an, there are other intangibles that are not being quantified. There are many things you should evaluate while purchasing impressions of course CPM is one of them but placement, timing and creative should also factor significantly into your decision.
All in all, RTB makes a lot of sense for big budget advertisers because you can outbid competitors for the best placement and timing. For medium to small budget advertisers, buying directly from a publisher will get you the best “bang for your buck.”