WTF is RTB? (Digiday WTF Programmatic for Publishers - 4/30/15)
1 like3,085 views
Real-time bidding (RTB) is a digital advertising technology that allows for the dynamic buying and selling of display ads on an impression-by-impression basis. This process involves various elements like targeting, audience segments, and decision-making algorithms, including tree and Bayesian models. Publishers need to understand how inventory changes affect valuations and bidding strategies influenced by auction mechanisms.
WTF is RTB? (Digiday WTF Programmatic for Publishers - 4/30/15)
- 1. Real Time Bidding DigidayWTF – Alanna Gombert 4/30/15
- 2. Real Time Bidding -‐ Breakdown • What is Real Time Bidding? • Is it really Real Time? • What is caching? • What elements determine ad decisioning? • Tree + Bayesian • Bid, Ask Call – Second Price AucLon
- 3. Real Time bidding (RTB)Defined eMarketer: Real-time bidding (RTB) is a digital advertising technology that lets marketers buy and publishers sell display ads dynamically, in real time, on an impression-by-impression basis. Scott Spencer, Director of Product Management, Ad Exchange, Google "Real time bidding (n); 1) A technology introduced in 2009 to make it easier for ad networks to buy only the inventory they want. 2) A common buzzword that is part of everyone's business plan in 2013. 3) The act of buying digital inventory from multiple publishers on an impression by impression basis, typically involving an auction pricing mechanism. 4) One of the biggest opportunities for publishers to participate in new media spend, but not a panacea if done in isolation.
- 4. Is it really Real Time? Real Time: of or relaLng to a system in which input data is processed within milliseconds so that it is available virtually immediately as feedback, e.g., in a missile guidance or airline booking system. Source: Google Real Time AdverLsing Systems rely on historical data that is cached as well as secondary or primary test variables. Cache update cycles maUer. The newest data will help you make the best decision.
- 5. What is a Cache and Decision Flow Cache (compuLng) -‐ Wikipedia, the free encyclopedia en.wikipedia.org/wiki/Cache_(compuLng) Wikipedia In compuLng, a cache (/ˈkæʃ/ KASH) is a component that stores data so future requests for that data can be served faster; the data stored in a cache might be the results of an earlier computaLon, or the duplicates of data stored elsewhere. Decision Flow: Impression -‐> Bid Engine EvaluaLon -‐> Decision (Bid or no bid, price to bid based on historical data or price floor + potenLally ad quality)
- 6. What Elements Determine Ad Decisioning? • TargeLng • Publisher • Audience Segment • CreaLve • AdverLser • Floors • ProbabiliLes and Likelihoods (click, conversion otherwise) • Learning • And more!
- 7. Tree and Bayesian Network Tree: A tree structure or tree diagram is a way of represenLng the hierarchical nature of a structure in a graphical form. It is named a "tree structure" because the classic representaLon resembles a tree, even though the chart is generally upside down compared to an actual tree, with the "root" at the top and the "leaves" at the boUom. Source: Wikipedia Bayesian Network: is a probabilisLc graphical model (a type of staLsLcal model) that represents a set of random variables and their condiLonal dependencies. Source: Wikipedia A simple Bayesian network. Rain influences whether the sprinkler is acLvated, and both rain and the sprinkler influence whether the grass is wet.
- 8. Example of a Tree – Source: Wikipedia A tree structure showing the possible hierarchical organizaLon of an encyclopedia.
- 9. AucLon Mechanics • Vickrey AucLon: A Vickrey aucLon is a type of sealed-‐bid aucLon. Bidders submit wriUen bids without knowing the bid of the other people in the aucLon. The highest bidder wins but the price paid is the second-‐highest bid. Source: Wikipedia • Modern adverLsing aucLons: adverLsers are charged only a penny more than the next lowest bid, with some adjustments that depend on the quality of the ad. Source: hUp://www.gsb.stanford.edu/insights/high-‐price-‐internet-‐ keyword-‐aucLons
- 10. Four Key RTB Publisher Takeaways • Real Time Bidding is a result of mathemaLcal equaLons derived from defined compuLng and math principals. It is not magic. • Inventory changes and shils can change learning and valuaLon. You are changing the inputs. • Understand how your exchange determines the winning adverLser bid. It may affect your pricing strategy. Price Floors: Price floors may block algorithms from bidding “true value”, especially when dynamic CPM is employed. • ProgrammaLc is just the method by which RTB algorithms are deployed across the exchanges and inventory pools, usually by Demand Side Plaporms.