1. How To Generate Targeted Traffic With Real-Time Bidding
Ratko Vidakovic
Director of Marketing, SiteScout
Hi, my name is Ratko, I’ve been the marketing director of SiteScout for the past 2 years.
SiteScout is the leading self-serve ad platform for real-time bidding (RTB).
Advertisers of all sizes use us to leverage the power of RTB technology for their ad campaigns.
Prior to SiteScout, I was a digital marketing consultant for several years, and before that, I was a corporate IT analyst.
So my background being a good mix of tech and marketing, My goal is to explain the technological benefits of RTB in a language that all marketers can understand.
And this really reflects a my main strategy at SiteScout, which is education. Teaching marketers about the benefits of buying media with RTB, and how it all works.
It’s still a fairly new technology, and a good portion of marketers still lack a full understanding of what RTB is, how it fits into the big picture, and how it can be used to drive business results.
This is why I try and help out and explain this technology wherever I can. And why I’m here today to talk about real-time bidding and how it can used specifically to generate targeted traffic.
My understanding is that most of your are publishers and that most of your are familiar with buying ads on Google AdWords: How many people currently buy advertising through Google AdWords?
Okay great, and, How many people would say they are familiar with RTB? I’ll do my best to relate my explanations back to AdWords, since that seems to be a common point of reference.

2. Agenda What is Real-Time Bidding (RTB)?
Why RTB Matters + How It’s Different
Beyond AdWords
RTB Targeting Tactics
Getting Started + Next Steps
Today I’ll be talking about What Real-Time Bidding actually is.
- Starting with some simplified illustrations,
- Then moving on to some high-level overviews of the ecosystem,
- And then finishing with an explanation of the mechanics behind RTB.
Then we’re going to move on to Why RTB Matters to Marketers (and How It’s Different) from traditional media buying.
- Here I’ll share some stats about RTB market trends,
- Then we’ll move on to dissecting the specific differences between RTB and direct media buys
Then we’ll move on to a discussion of what types of targeting tactics are available to you with RTB. (more on a practical side)
Then I’ll finish off with some specific next steps for getting started with RTB.

3. What is Real-Time Bidding (RTB)?

4. Open Auction for Each Impression
What is RTB: In a nutshell
In the split-second between visiting a web page, and the page loading on your screen, the page's ad space is put up for auction and sold to the highest bidder.
A DSP (or demand side platform) lets you, the advertiser, bid on this ad space, based on the rules that you set. If your bid is the highest, your ad is shown.
Same concept as Search Engine advertising, where you bid against other advertisers for keywords, except in this case, you’re bidding on audiences.
That’s basically it. It’s a very very simplified illustration, but it’s essentially what’s happening.
The Goal: placing banner ads in front of the right audience in order to drive brand awareness, demand, or conversions.
Keep in mind, this is an illustration: This auction process has no actual auctioneer. It’s done by computers in less than 50 milliseconds.

5. High level view of the technology ecosystem
High level view of the technology ecosystem. Half a dozen more exchanges than what’s shown here.
Demand side platforms (DSP) = technology providers that enable buyers or advertisers to participate in the RTB process
Supply side platforms (SSP) = technology providers that enable publishers to make their inventory available to the RTB market
Illustrations one of the biggest benefits of RTB = reach and efficiency (we’ll get into the nitty gritty about efficient in a moment)
Real-time exchange of billions of impressions
Tens of thousands of diverse publishers

6. Low level view of the mechanics
Ads sold on impression-by-impression basis
Each imp. auctioned as they occur in real time
Each impression evaluated on 40+ variables
Only bid on impressions that match your rules
Only pay 1 cent more than next highest bidder (similar to PPC platforms like AdWords)
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The higher the bid, the earlier your ads are served in the user sessions
The higher the bid, the more volume you receive (lower sessions depths will always get more)

7. Why RTB Matters

8. Growth of RTB
It’s growing fast and it’s here to stay.
Blue circle = total online advertising market
Green circle = total online display advertising market
Orange circle = total RTB market within the overall display advertising market ….
Source: Interactive Advertising Bureau and Price Waterhouse Cooper (2012)

9. Growth of RTB
Quarter of online display spend to be RTB by 2015

11. If there is one thing you need to remember, this is it: The fundamental difference between direct buys and RTB is the shift from buying ad impressions in bulk (direct), to auctioning each impression off individually to the highest bidder (RTB).
With direct buys, you are essentially buying impressions in bulk, in order to have your ads seen in a specific context (e.g., on ESPN.com). You have the ability to filter the audience that sees your ads with targeting rules such as geography or browser type, to name a few of the basics, but you’re still ultimately targeting your ads to a specific website.
This works especially well for brand advertisers and agencies that are very sensitive to the placement of their ads, and are willing to pay premium prices to secure such inventory. Brands are also afforded more freedom on the creative level when working directly with publishers. Rich media formats, like page takeovers and other types of custom brand integrations, are currently a luxury only possible with direct buys.
With RTB, each impression is profiled and evaluated in milliseconds during the auction process (while a page loads). You can target ad viewers at a demographic, psychographic and behavioral level, but the reach of RTB enables you to do so across a wide array of sites, rather than on just one, making it possible to target audiences at scale.
So, instead of being limited to buying ads on ESPN.com to reach your audience, RTB allows you to buy ads on (almost) any site that “sports fans” may visit. You also have the ability to take a more agile approach to campaign optimization, since each impression is being bought individually, allowing for more efficient performance and control.
Everyone wants exposure to the right audience, which is why this approach works well for almost all advertisers.

12. Direct buys = targeting inventory based on the context of the site
RTB = since you’re looking at the characteristics of each impression or visitor, you can targeting specific audiences, no matter which sites they are on.

13. Another fundamental difference between direct buys and RTB is the level of certainty that your ad campaigns will receive the volume you want or need.
With direct buys, you agree to buy a heap of ad inventory at a fixed CPM rate that the publisher will deliver in the future. In that sense, the inventory is “guaranteed” or “reserved” for you. Barring any external issues, you will receive the impressions you agreed to purchase at the outset.
This works well for advertisers and agencies that have specific exposure goals and require a high level of certainty that campaigns will deliver. In exchange for paying a higher rate to the publisher, you get certainty of campaign volumes and avoid the naturally competitive landscape of RTB.
With RTB, as the name implies, you are in an auction with a multitude of other advertisers, all bidding at different rates (explained later) for each impression, in real time. In such a dynamic environment, the ad inventory is considered “non-guaranteed,” due to the unpredictability of the marketplace.
When you don’t know what other people are bidding, there is simply no guarantee that you will win the impression you bid on. Furthermore, guaranteed buys usually have priority over RTB. This means, if the demand for guaranteed inventory on a particular site increases, the supply available on RTB for that site correspondingly decreases.
Another way of saying this is “reserved” vs. “biddable”
In the first case, you are making an agreement for a certain # of impressions. (reserved supply)
In the second case, you have no explicit agreement with the publisher. Just an open auction (biddable supply)

14. Example Insertion Order (IO)
Here is an example of an insertion order that you need to negotiate and fax/ back and forth, before your campaigns go live.
In any case, this basically reserves or guarantees you a direct buy that gets served before RTB.
We’ll talk about workflow in a second, but for now it’s good to know what is meant by a direct buy agreement.

15. Another difference between direct buys and RTB is the workflow of launching campaigns.
Direct buys rely more on human beings to get things done (execute)
RTB relies more on technology to get things done (execute)

16. This is typical agency workflow.
For the most part, direct buys consist of a manual process that involves hours of human effort in planning and execution (pdf download). It requires reaching out and making initial contact with the publisher’s sales team, negotiating and planning the “insertion order” (a contract which we saw a few slides back), ing ad tags back and forth, and so on, all in preparation to launch.
The publisher ultimately controls the flow of the campaigns using their ad server, which means that there is a natural delay when it comes to campaign control and reporting. This asynchronous process is not only prone to miscommunication and human error, but also requires hours of human time on something that could be handled instantaneously with a programmatic solution.
Then, there is the issue of management complexity. Take the traditional media buying process – negotiating a direct buy with a publisher, and working through all the setup – and try multiplying it by ten or twenty. Now, imagine the complexity of having to run them simultaneously, like an agency would, and you quickly realize the overhead required for management alone. Not to mention the process of negotiating with various sales teams, which is an art in and of itself.

17. High level view of the technology ecosystem
High level view of the technology ecosystem. Half a dozen more exchanges than what’s shown here.
Demand side platforms (DSP) = technology providers that enable buyers or advertisers to participate in the RTB process
Supply side platforms (SSP) = technology providers that enable publishers to make their inventory available to the RTB market
Illustrations one of the biggest benefits of RTB = reach and efficiency (we’ll get into the nitty gritty about efficient in a moment)
Real-time exchange of billions of impressions
Tens of thousands of diverse publishers

18. More control is in the hands of the advertiser. Much more Efficient
More control is in the hands of the advertiser. Much more Efficient. Much more Reach. Ultimately, much more Transparency
Similar to AdWords.
Controlled
Execution

19. Another primary difference between direct buys and RTB is the nature in which inventory is priced.
This difference stems from the fact that with direct buys you are buying impressions in bulk; whereas with RTB, you are bidding on individual impressions separately.

20. LEFT: Direct buys are almost always priced in fixed CPM rates, where the inventory is sold in bulk and all impressions are essentially priced the same (e.g., $5 CPM, or $5 per thousand ad views). This pricing model has been the standard since the inception of the banner ad, and doesn’t look like it will be going anywhere in the foreseeable future.
RIGHT: With RTB, each impression is auctioned off. Since each impression is priced individually the de-facto metric for RTB pricing is effective CPM or eCPM.
Another way of thinking about how these two pricing models differ is by using an analogy like apples. Buying ad inventory directly from publishers is like buying giant bushels of apples. You pay a fixed price for each batch, and receive various levels of quality within the bunch.
But with RTB, you are essentially bidding for each apple (impression) based on its individual characteristics. This means that you still end up with 1,000 apples at the end of the day, but the overall cost for the batch will be a dynamic value derived from all the individual prices you paid for each – hence the term effective CPM.
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Direct buys, almost always priced in fixed CPM rates (in some cases they might take more risk and do CPC or CPA, but that’s muddying the waters for now).
RTB prices each impression individually, so what you end up with is an effective CPM or eCPM, based on all the various individual prices you paid.
Another way of thinking about pricing is using an analogy like apples or rice.
Traditional direct buys = buying apples in bulk
RTB = buying them one-by-one, based on specific targeting criteria

21. The final difference we will cover between direct buys and RTB is the accessibility of each approach. Given the “traditional” nature of direct buys, they typically have much higher barriers to getting started compared to RTB.

22. Hurdles to Direct Buys Budget (Commitment) Ad Server
Creative control, auditable stats, etc.
Negotiation Process (Pricing)
Management Complexity
Multiple direct buys get cumbersome
The first barrier faced by marketers performing direct buys is the sizable minimums in ad spend required by most publishers to get started. In general, you can expect a commitment of at least $5,000-10,000 for a direct buy of guaranteed inventory.
On much smaller sites, you can get away with paying flat rates of a few hundred dollars. For larger publishers with attractive inventory, you won’t get any attention unless your budget is in the 5- to 6-figure range. To many small- to medium-sized marketers, this can be a non-starter.
Remember: this is considered “premium” inventory in the eyes of the publishers, so don’t be surprised when you hear the CPM costs and minimum spends. The truth is, when going directly to the website publisher, there is an unspoken rule that all prices are negotiable, so website publishers will often quote surprisingly high rates. It’s not uncommon to receive rate cards anywhere from $10 to $75 CPMs (and beyond!) from many ad sales teams. Such rates can be completely impractical for anyone but large brands.
Serious media buyers also need to consider the costs for an advertiser-side ad server. If you are managing direct buys from multiple publishers, you want to be aggregating and auditing your own numbers, in case of reporting discrepancies. You also want a central place to log in to and reduce the complexity of logging in to multiple publisher ad servers.
I can elaborate on this point in a future article, but for now, it’s important to understand that with direct buys there are extra costs associated and technical learning curves to overcome that may not be obvious at first thought.

23. Benefits of RTB More accessible (depending on DSP) Efficiency
Workflow (programmatic)
Pricing
Targeting (impression level)
Reach (unparalleled)
As opposed to direct site buys or buys through large ad networks, which have higher barriers for marketers to get started, buying RTB inventory through a DSP (depending on the one you choose) has a much lower barrier in terms of financial commitments and operational management. Obtaining an ad server also isn’t necessary, since DSPs provide the ad serving and publisher integrations on your behalf. So, for the marketer, there is far more control and far less friction in the media buying process in a programmatic RTB environment.
At the end of the day, RTB is a programmatic form of media buying that is very similar to AdWords, and many people indeed do ask the question “Isn’t this kind of like AdWords?”
The answer is: “Somewhat, but not exactly.”

24. Beyond AdWords Extent of Reach Targeting Options Freshness of Data
Pricing Options
Accessibility
So obviously AdWords is a great platform, but it’s main strength is Search keyword targeting. When it comes to it’s display network (aka. Content Network), it’s not very strong, except for the fact that you can bid CPC.
Actually, my last article on Marketing Land was about about this subject. In a nutshell, the main things to keep in mind when comparing RTB and AdWords, is that RTB has:
Much larger reach!
Far more advanced targeting options (demographic, behavioral, interest, etc.)
The one tip I would give everyone, is to test your banner ads on AdWords content network before moving over to RTB, only because they allow you to run campaigns on a CPC basis, which is less risky.
(You only pay when someone clicks. With RTB, you pay for every time your banner ad is shown, so you want to make sure that you have engaging banners at the outset.)

25. RTB Targeting Tactics
Now that we’ve covered most of the conceptual stuff surrounding RTB, let’s now dive into more concrete material -- Covering various targeting tactics that can be used by you in a practical sense.

26. Targeting Tactics Domain Level Geography Device and Browser
Contextual (e.g., pages related to “careers”)
Demographic (e.g., gender, age, education, …)
Retargeting (show ads to previous visitors)
Mobile (e.g., device type, carrier, app, GPS)

27. Domain Level Targeting *
Creating a custom media plan is easy. Simply filter our list of over 60,000 websites by category, country, exchange, device type, and allowed vertical. Just save your plan for future campaigns.
Example: careerbuilder.com, monster.com, etc.

28. Geographic Targeting *
Marketers can run campaigns all the way from the international or national level, all the way down to locally targeted campaigns for local businesses. The opportunity is everywhere.
Geographically target your campaigns – Country, Region, or City

29. Target ads on specific operating systems, devices, and browsers
OS / Browser Targeting
Target ads on specific operating systems, devices, and browsers

30. Contextual Targeting *
Show your ads only on pages that contain specific content. For example, you can now show a snowboard ad to people reading a page about snowboarding.
Works very much like Google’s AdSense ads, which serve ads based on the actual content of the pages. Which Google determines using their automated bots.
This is very similar technology, now available through the RTB channel.
Target only URLs (pages) that match your chosen contextual categories

31. Demographic Targeting *
Reach audiences based on demographic information like gender, age and interests. You know your target market best. Now just define them.
Target audiences based on demographic, psychographic, and behavioral data

32. Show ads across the web to your visitors
Retargeting *
Get a second chance to make a first impression. Target people that have already visited your website with custom ad campaigns to bring them back.
Create your own highly-targeted audiences
Leverage existing traffic from other channels
Target or “untarget” your audiences
“Untargeting” = exclude existing customers
Frequency capping to mitigate resentment
Time-based retargeting rules
(example: show ads for 72 hours, then stop)
Show ads across the web to your visitors

33. Why Retargeting? Get a second chance to convert a visitor
Illusions of grandeur ($$$ budget)
Fantastic performance (ROI)
Build an asset by capturing visitor data
Up-sell and cross-sell to converted visitors
Leverage existing traffic sources!

34. Target mobile devices by Operating System, Device, and Carrier
Mobile Targeting
Mobile Carrier
Show your ads on mobile phones of specific carriers. Mobile marketers have figured out that every carrier performs differently. So make sure to test them separately.
Mobile Handset
There could be many reasons for showing your ads on specific handsets. iPhone or Android? Smart phone or feature phone? Samsung Galaxy SIII or HTC One X? Your call.
Device
You can tell a lot about someone from the devices they use. You can show your ads to Windows users or Apple users. On desktop devices or mobile devices. Even tablets, smart TVs and game consoles.
Target mobile devices by Operating System, Device, and Carrier

35. Ultimate Benefits of RTB
Highly-targeted online display ads
Layer multiple target criteria
Vastly more efficient ad spend
Only buy the impressions you want
Fully transparent statistical data (many levels)
1st and 3rd party data integration (targeting)
Access to 13 major exchanges (15B imps/day)

36. Getting Started – Next Steps
Think about your target audience
Prep for demographic/contextual campaigns
Place retargeting code on websites
Leverage existing traffic sources + build data
Prepare banners ads for testing
Variety is the key
Test on AdWords using CPC to reduce risk
This presentation has been about generating demand, and to do so, you need to get your message in front of the right audience.
Real-time Bidding has made it more efficient and easier than ever to create very lean display advertising campaigns, that let you test different messages to different audiences, and figure out which ones are responding best to your campaign. From there, you can take what you have learned to really scale your campaigns through direct buys or targeted RTB buys, without having to take huge risks or waste a lot of resources. ….

37.
This presentation has been about generating demand, and to do so, you need to get your message in front of the right audience.
Real-time Bidding has made it more efficient and easier than ever to create very lean display advertising campaigns, that let you test different messages to different audiences, and figure out which ones are responding best to your campaign. From there, you can take what you have learned to really scale your campaigns through direct buys or targeted RTB buys, without having to take huge risks or waste a lot of resources. ….

38. Thank You.
Ratko Vidakovic
Thank you.