Thursday, December 19, 2013

Real time bidding of display ads


Before the digital age, ad space on television or radio was done in a very non transparent process where full understanding of the types and quantity of viewers you were purchasing. High barriers to entry meant that access to traditional mediums for advertising were for the big players only. Moreover, planning for advertisements happened months in advance and any last minute purchases cost a massive premium. The internet changed this. With big data, marketers can narrow the scope of their campaigns to a defined audience and also interact with the audience to ensure that the message was transmitted. Any small business can purchase ads on google or Facebook alongside the big players such as Coke or Pepsi. Moreover, given the additional big data available, advertisers can quickly test shift their strategies and fine tune them on an ongoing bases to ensure the desired results are achieved.

Programmatic buying enables advertisers to use complex algorithms to purchase ads based on prespecified parameters. Marketing is no longer a touch feely topic. There is a high degree of data and statistics involved. Real time bidding is to digital advertising what high-frequency trading is to Wall Street. Computerized, algorithm-driven trading allows for quick buying of ad impressions according to pre-set parameters. Twitters purchase of MoPub, an ad exchange with a real-time bidding platform, reinforces the market movement towards such platforms. It will be interesting to observe how Twitter continues to monetize its platform using advertisements powered by the MoPub technology.

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