What is Mobile Real-Time Bidding? | Mobile Advertising

For most the first step of any digital journey begins with a search on your smartphone. With this as a given, if brands hope to reach customers where they are, best to include mobile marketing in your media strategy.

Mobile marketing is designed to reach customers on a variety of mobile devices such as smartphones and tablets through multiple channels like e-commerce stores, email, SMS, apps, and social media. All of this is central to cross-device targeting, which seeks to communicate consistent messaging across various media.

There are over 3.6 billion smartphone users in the world, there are also a ton of mobile marketing stats and data that indicate how beneficial mobile marketing actually is for businesses. What this all boils down to is mobile marketing is crucial and doing it efficiently is even more so. This is where real-time bidding comes in.

What is Real-Time Bidding (RTB) in Advertising?

Real-time bidding (RTB) is a form of programmatic media buying, where ad inventory is auctioned automatically by publishers via Supply-Side Platforms (SSPs) to advertisers using Demand-Side Platforms (DSPs). The process happens in milliseconds and is a subset of programmatic advertising – one of the most efficient ways to exchange high-value impressions that are tightly targeted according to specific audience and demographic criteria.

How Does Real-Time Bidding Work?

The RTB process relies on three types of platforms:

• Supply-Side Platforms (SSPs) are where publishers provide ad inventory, which consists of ad space in apps, websites, and other content channels. These platforms seek to monetize ad space and maximize income for publishers.
• Demand-Side Platforms (DSPs) let advertisers purchase cost-effective ad impressions, bidding for the best cost per impression possible given defined targeting.
• Ad Exchanges provide the neutral ground where DSPs and SSPs come together, enabling ad transactions via the real-time auction.

The auction takes place automatically in real time, while a user is interacting with a platform such as an app. Here’s how the process looks, step-by-step:

• When a user interacts with an app, a bid request is sent to an SSP. This request includes demographic and targeting data such as location, which informs the SSP which ads in the pipeline would fit the user.
• The SSP relays this request to an ad exchange.
• The ad exchange interacts with integrated DSPs and notifies them of the available impression ready for purchase.
• The DSP matches targeting data with its database of available advertisers and algorithmically determines bid prices for all its connected advertisers with campaigns that match the target.
• The DSP then send this information back to the exchange, including advertiser, ad information, and suggested price for the impression.
• The ad exchange compares bids from multiple potential buyers and the ad creative connected to the winning bidder gets shown to the user.

The Impact of Mobile RTB on Mobile Marketing Campaigns

In and of itself, mobile marketing is a game changer. Integrating programmatic media buying into mobile marketing strategies has been significant. Some of the benefits of RTB in mobile marketing include:

• Lifting results in ad performance – RTB allows advertisers to target audiences quite specifically, which not only leads to cheaper ad spend because the sales process is automated, eliminating friction.
• More accurate targeting – With RTB, algorithms automatically determine whether users match advertisers’ target profiles. This leads to improvements in click-through and conversion rates because ad viewers are essentially pre-qualified leads.
• Better user interaction – In some contexts, RTB ads can allow user interaction, and these types of ads have proven even more effective, in some cases showing as much as a 218 percent lift over standard banners.
• Reduce overall cost – At the end of the day, more accurate targeting and efficient per-impression pricing mean ads cost less while simultaneously driving better sales results, meaning advertisers can spend less on advertising overall. This is the fundamental way RTB combined with mobile marketing makes a difference for businesses.

The Future of Mobile RTB: Impacts and Challenges

RTB has made a tremendous impact on mobile advertising in recent years, and there’s every indication that will continue. IMARC Group expects the RTB market to grow to $36 billion by 2027, which would represent a 23% CAGR from now until then.

This is no surprise, considering the benefits of RTB. To recap, RTB lifts ad results, lowers ad cost, improves the user experience, helps build brand awareness, and lets advertisers efficiently implement a coherent cross-platform marketing strategy.

Still, RTB isn’t without challenges. For one, a sea change is happening across mobile and online platforms as privacy becomes the number one concern for many users. This is causing rapid change to how much hyper-specific targeting data advertisers and programmatic platforms can gather and use, which will certainly lead to new targeting challenges. What’s more, RTB can limit the control advertisers have over ad context, since mobile advertising RTB is mostly used with banner ads. As mobile platforms continue to evolve, some believe banner ads will become less and less relevant, as more immersive experiences take hold.

What this all means for advertisers is that the number one asset you can cultivate is flexibility. Mobile marketing is changing at breakneck speed, and the best thing you can do is stay on the cutting edge. The best way to do that is to work with seasoned professionals whose job is to do just that.

If you want to position yourself to get the best possible results from mobile RTB, mobile marketing, and your overall cross-platform strategy, contact MNI today, and talk to us about your best strategy now and in the future.