What is difference between programmatic advertising and real time bidding

We Have dealt with this and totally get it. Like deciphering the concept of these two were not enough, the journey of confusion afterwards can be quite a challenge. With the similarity in too many ways, many find it hard to actually comprehend their differences.

The only difference is, “RTB is Programmatic but Programmatic advertising is not completely RTB”. Let us digest what the statement means with a brief overview of the two concepts and the subtle difference lying in between!

Programmatic Advertising

Programmatic ads, sounds fancy and quite complicated! It is nothing but the software based ad technology which automates the whole or part of the advertising process. One of the ways of automated process makes use of Open marketplace Real Time Bidding (RTB) for exchanging the ad space inventory through an exchange for a value across various channels like mobile, social media, display ads etc. Other types of programmatic advertising are Private market place, guaranteed, direct, etc. Playing a vital role in media buying and precise targeting of the audience, programmatic advertising stands to provide efficiency in optimised ad spending and resource utilization.

Process

Programmatic marketing uses platforms like DSP (Demand Side Platforms), DMPs (Data Management Platforms), SSPs (Supply Side Platforms) and other support systems like Ad exchanges, Publishers, Ad servers and trading desks. As the figure shows the flow of process and data in the system, let us understand each component’s function.

 

What is what?

  • Publishers own the ad inventory of websites and hence serves as the front end platform where the advertisements are delivered. From small specialized websites to large multifaceted websites, publishers have got a variety of ad inventories to cater to diverse audiences through suitable channels.
  • Ad servers are the channel through which digital ads are stored and distributed among appropriate publishers made possible with simple coding. This helps to utilise a number of publishers for ad publishing and tracking ad performance.
  • When a marketer has a DSP to help buy the ad inventory, publishers have their counterpart called Supply Side Platforms (SSPs) to help them sell their inventory to appropriate buyers through the ad exchanges.
  • Ad exchange is like a market where the marketers and the publishers meet virtually and exchange their inventory and the ads for a value. All of the exchanges happen through a bidding process considering costs and the attributes of the place, users, etc., to fit with the right options.
  • Advertisers and agencies bank upon Demand Side Platforms (DSPs) to purchase millions of targeted ad impressions with the help of data analytics for their digital advertising. This takes into account User behaviour, Psychographics, Demographics and available budget to run the show.
  • Trading platforms or Trading desks are the agency based platforms that enables agencies to cater to their clients on the needs of programmatic media buying with improved accuracy and efficiency.
  • Contemporary marketing is nothing without data. In programmatic advertising, Data Management Platforms (DMPs) help the marketers in terms of receiving, storing, analysing and providing insights on the trends of a particular campaign, for instance. In the whole process, data is generated at each and every step, which gets stored in the DMP and can be analysed.

 

What’s the difference between programmatic ads and RTB?

RTB vs Programmatic advertisingBefore we move onto the differences, let’s all make sure we understand the concept of the two.

Programmatic advertising is a technology enabled system that is methodical and process oriented which delivers efficient results. In programmatic, advertisers are armored with defining the metrics like demographics, user behaviour, etc., so that they can reach the right audience at the right time. This in turn results in better connection boosting conversions. On the other hand publishers get their desired price for their ad inventory.

However with real-time bidding, it is a computer aided real-time auction of ad inventories through an ad exchange from which the advertisers buy the media. If the listed ad inventory at the exchange fits with the defined criteria of advertisers, they buy the media to reach the right audience at a price within their budget.

Evolution of the programmatic ecosystem

Wait a minute! Don’t both concepts sound similar? Yes it does. The variations in user behaviour and the multi-channel buying trends require advertisers to act swiftly and cater to the target market across audience’s user devices like smartphone, tablets and PCs. This envisaged a different set of needs that gave rise to other types of programmatic buying namely, guaranteed buying and private marketplaces. So it is clear that programmatic advertising encompasses not only RTB as a means, but also other ways of media buying mentioned.

And the subtle difference is…

The subtlety of difference lies in the fact that all RTB transactions are programmatic but not all programmatic ads go through RTB transactions. Apart from RTB, there are other ways to buy ad space such as traditional guaranteed buying of inventory from a particular website for a period of time or a number of impressions. Concepts demystified?  If the subtleties are still too strong, fret not, the below illustration can help.

 

From this you can tell that RTB is just one of the ways to buy media in programmatic advertising in addition to other types of media buying channels.

Effectiveness unfolded

Real-time bidding vs Programmatic adsIrrespective of you being a publisher, advertiser or ad tech enthusiast, the concepts of RTB vs programmatic advertising is simple but understanding those may not be all that easy. But investing some time, by exploring the system and its concepts can make implementation effortless.

In analyzing future opportunities of programmatic and RTB, we see programmatic is not limited to RTB transactions being just an ad inventory exchange provider. It’s only a matter of time that programmatic advertising takes on the world by it’s a full-fledged effective automated targeting system. Keep exploring.

Bhardwaj Brothers
Founder
Hey Readers, Welcome to my blog ByNext. I'm Akash Bhardwaj, a professional-blogger from New Delhi, India.

I started ByNext as a passion and now it's empowering more than 500,00+ readers globally and helping them to make money with their blog.

Here at ByNext I write about Starting & managing a blog, WordPress, Social-media, SEO and Making Money online.

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