By Gregory Gor Global Head of Media & Entertainment Practice at DataArt
Programmatic trading, which is the actual technology behind real time bidding processes, has been around for some time, since the beginning of the 21st century when the first advertising exchanges began to emerge. While the initial development of ad exchanges was neither easy nor inexpensive, the appearance of these exchanges on the global market heralded an era of a stock exchange-like environment in the marketing and advertising industry.
RTB as a form of programmatic advertising is a relatively new technology that came about as the result of almost a decade of extensive efforts of companies like X+1 and Lucid Media. Today these companies form the LUMAscape, which is basically a number of companies working in the ad exchange marketplace that have been included on a list compiled by the LUMA Partners investment banking firm. LUMA Partners works at the intersection of media and technology. RTB itself became a product of necessity, representing the process of valuing and bidding online for an ad impression in real time and allowing communication with different online publishers who sell their inventory. In simple terms, it’s a piece of space on the user’s screen when they visit a Web site. Publishers as sellers of such inventory are often combined into networks called SSPs (Sell-Side Platforms), while the RTB technology allows buyers and ordinary users to utilize the services of SSPs via intermediaries called DSPs (Demand-Side Platforms) and buy specific impressions at a price they are comfortable with. DSPs play a very important role in the current ecosystem as they provide marketers with widespread access to inventory and vertical and lateral targeting, with the ability to serve ads, bid on them in real-time, track the ads, and optimize via a single convenient UI. Once a setup is complete, the whole auction process happens in milliseconds in the background of the loading page on the user’s screen.
There is a reason why traditional CPA and CPC display advertising has become inefficient and obsolete. Publishers are unable to get good returns on the inventory they’re selling, and a large portion of their impressions simply goes unsold. Programmatic RTB solved not only this problem, but also allowed buyers of these impressions to target specific audiences based on the information about billions of users browsing the Internet every day. Although RTB officially began to roll out in the second half of 2009, it has already captured over 40% of display advertising in the US with an average annual growth rate of 42%.
DataArt’s development team, as a software provider for a number of thriving US-based media companies, has not lagged this trend. Over the past couple of years, the firm has deployed several Programmatic trading and RTB projects and in order to show all the benefits of implementing these highly complex solutions for your business, we have decided to develop a proof of concept based on the open-source RTB Kit and integrate it with one of the leading digital exchanges.
In order to show our RTB Demo Kit mechanics, we decided to deploy buy-side functionality as an example. In other words, our Demo Kit allows you to create a custom banner and instantly see it while browsing the Web sites that are integrated with our ad exchange. Alternatively, the Demo Kit can be modified to target specific groups of users in a given area. This allows you to see conversion stats on how many users visited the site after running a quick campaign.
Now let’s take a closer look into the mechanics of the system. The current RTB Demo setup is working as a standalone application, hosted on Amazon S3, and allows the user to log in to the dashboard, create a custom banner according to templates of predefined size, and determine the CPM budget the user desires. Once the custom banner is ready, it is automatically given a tracker, which is a tiny pixel carrying specific code recognized by our partner ad exchange system and allows the RTB Kit to take part in the available display auctions on thousands of the Web sites integrated with the ad exchange. After the campaign starts, it provides live statistical data displayed in the Dashboard of the application that depicts the current budget and amount already spent as well as user conversion rate in the form of graphs. Another important feature of our RTB Demo Kit is that it allows the campaign owner to choose specific groups of users to be targeted, and thus participate in the auctions that have the best chance of displaying the banner to the most relevant audience. Information about users visiting the publisher’s Web sites is obtained and managed by our partner ad exchange in this case. All in all, the RTB Demo Kit showed very good test results. We had a chance to pull some of our staff into the testing process, which provided us with accurate and unbiased feedback. Our Demo Kit can be easily modified to integrate with other major DSPs and ad exchanges, as we have demonstrated in similar projects for our current clients.