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Real-Time Bidding: The Budget-Stretching Online Advertising Revolution

By Stewart Gandolf, Chief Executive Officer

real time bidding[First in a series. Introduction to RTB. ] Internet advertising has always been more than a bit complicated and more than a bit technical.

The typically rectangular Banner Ad is the most familiar, most prolific and usually appears in context with the web page content. The revenue model for banner ads can vary. Payment may be based on appearing/being seen on a page, or as a Pay Per Click (PPC) ad, with a charge to advertiser only when there’s a visitor click-through.

Online advertising can be a fast and furious endeavor. And, if you hit a planning pothole, effectiveness (and your budget) takes a nosedive. But fortunately, technology is reducing the shortcomings. The emergence of Real-Time Bidding (RTB) is dramatically changing the way Internet display advertising works…for the better.

First, some helpful background...

Call it the 100-millisecond solution for hospitals and online healthcare advertisers who want significantly greater efficiency from their monthly $5,000-$10,000 Internet budget. Hospitals and medical facilities doing online branding or service line advertising can benefit with RTB which more accurately targets their messages, for example.

RTB is significantly faster and more efficient than earlier systems. And, for the healthcare advertiser who is facing-down increased competition with a slim budget, RTB is more cost-effective.

Historically, online display advertising has been wasteful. The Internet began with a busy display of banner ads in various shapes and sizes, filled with irrelevant ad material. At best, it was an indiscriminate scattering of random ads that consumers quickly learned to mentally tune-out and ignore.

Later, contextual ads appeared, displaying ads that generally related to the keywords in the web page content. These ads performed a little better, but Return-on-Investment (ROI) was still lagging. Subsequently, the Pay Per Click (PPC) Internet advertising model improved ROI and efficiency with auction-based ad placement and payment made when the site visitor clicked on the ad.

Traditional methods of buying online display ads generally did not account for the fact that every visitor impression is not equal, although the unit cost is a flat rate. Real-Time Bidding answers that problem with what some people believe to be nothing less than a revolutionary leap.

RTB writes a new page in this bumpy ad history. And remarkably, the entire RTB transaction process—matching data, bidders and an algorithmic optimization—happens faster than the webpage loads—in about 100 milliseconds.

What Real-Time Bidding is and does…

In non-technical talk, Real-Time Bidding is a relatively new system for instantly delivering online display advertising, one ad impression at a time. A computerized bidding and placement system allows for individual ad impressions to be considered and purchased (or not) in real time. In a blink, advertisers can decided to put a specific ad in front of a specific individual web visitor, place a bid, and if successful, present their (specific) message.

With RTB, advertisers can set their buying criteria, required audience demographics, present a desired message and monitor the performance of their campaign with laser focus precision.

Benefits of Real-Time Bidding for Hospital and Healthcare advertising

Perhaps the most significant advantage of RTB for hospitals and healthcare advertisers is the budget control and improved ROI, buying online impressions that actually (and exactly) matter to them. Online display advertising appears when and where the targeted audience (demographics) matches the intended message (impression) and is available at the right cost. The budget goes further than using poorly targeted messages and “bulk” impressions.

In addition to cost efficiency and better results, RTB benefits include:

  • Increased control over campaign performance
  • Enhanced consumer targeting capabilities
  • Improved cost-effective reach and frequency
  • Near elimination of wasted impressions and ad dollars
  • Greater price/performance controls
  • Knowing “what works best” guides fine-tuning adjustments

We’ll be bringing you more about the RTB story and how these efficiencies and improvements are achieved. The next article in this series will include insight from the Healthcare Success display-advertising partner. And if you have questions or an immediate need, please call me directly [800-656-0907] or email me [[email protected]].

Plus, you’ll find additional material related to this topic here: Google White Paper: Benefits of Real-Time Bidding and What is Real-Time Bidding (RTB)?

Stewart Gandolf, MBA

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