A simple and effective way of looking at real-time bidding
You may feel blinded by the science of RTB, confused by the complexity of the technology behind the advertising mechanism or alarmed by the endless acronyms that come across your desk when you’re dealing with the task of allocating advertising budget to RTB.
But the truth is if you’re in control of the marketing budget, then you’re an RTB expert.
It’s just media, plain and simple. There is still an emotion attached to someone seeing a piece of creative in a certain position and responding to that piece of communication, whether it is on the screens of a flat-screen television or if it’s an advert on a website that has been purchased via RTB. Like any piece of content, it should extol your brand values and lead customers to purchase.
But when it comes to real-time bidding many people forget this and that’s when advertisers can begin to feel like they are losing control of their digital marketing strategy.
So, when you’re looking at the advertising pot of money and you get to that three-letter acronym, don’t freak out. If you think about RTB like any other media you’ll be ahead of many astute marketers who inexplicably lose their mind at the mere mention of automated advertising.
It’s media Jim, but not as you know it
You’ve got to understand that advertising is not the driving force behind some of the most successful online brands. If you take ITV, the core part of its P&L is advertising, the same is true for newspapers and outdoor.
But if you take a successful online brand like eBay, it stands in complete contrast to these media owners. Pierre Omidyar is the bright spark that came up with a competitive online marketplace where people could buy and sell.
Seventeen years after the business was founded it collects tens of millions worth of digital advertising in the UK.
You must never forget that advertising success in the digital space is based upon usage. The pillars of the digital industry are based on other revenue streams so you will have to do more analysis to work out the best places to advertise your brand.
Ask the right questions to prevent analysis paralysis
The man on the street will be able to tell you that more people are online and using mobile phones and, as a result, traditional media like newspaper and magazine circulations have been falling.
This rapidly changing media landscape has led to analysis paralysis. Most marketers aren’t asking the right questions and simply don’t expect the levels of insight that they do from other types of media, such as television, outdoor, or magazines and newspapers.
Digital media has to be held up to the same standards as other platforms and if you demand this then you will get a more effective return on your investment.
And if you ask the right questions but get an answer littered with jargon then it might be worth moving your business over to someone who wants to empower you rather than trying to make you feel stupid.
Apply the same measurement principles that you would for a television advertising campaign or an outdoor campaign
If you start from the base that you’re spending money for a return on investment then you’re going to get further than many advertisers who forget to apply this most basic principle of business strategy.
Irrespective of whether you are looking at brand uplift or whether you want to see an increase in sales, you’ve got to be able to demand the insight from the agencies that you work with.
By demanding more, you will become more efficient in the way you allocate your digital advertising budget.
Think beyond reach and frequency
There’s still a reach and frequency mentality because the likes of Google and Yahoo! have been pushing a model that suits the procurement department. These number crunchers have been sold on back-end technology, which can attribute ROI down to the last penny.
As a result, this industry is driven by direct response, which is short-term thinking and could damage a brand in the long run.
If direct response drives the market then inevitably a client’s expectation is going to rise and the cost per acquisition is going to be driven down. The reality is that a simple way of driving down the cost of acquisition is to drive down the cost of media.
The frustrating thing is that digital media gives you the tools to do better. You have the ability to request the levels of insight that you need to do better, to know your current client base better, to know your potential client base better, to be able to separate your customer base better.
This takes time and effort so many advertisers turn to reach and frequency which is chasing that individual and chasing that data piece in isolation. This means that you are essentially taking the media piece out of the decision-making process.
The reason marketers should not take this approach is that inevitably you will get dwindling return on your investment. By chasing the individual, all you’re doing is asking the same question over and over again. And if they keep saying no, then you need to admit defeat and look elsewhere.
The cost-per-acquisition approach means that brand virtues have been forgotten. Instead you should challenge this model and ask: what value do I put on this transaction?
If you think like the media expert that you are, then you should be analysing where your brand should be advertising for the optimal engagement and, ultimately, set up the path to purchase.
By applying your media skills, you’ve already become a real-time bidding expert. Just don’t be put off by those wretched acronyms.
