RTB vs Programmatic Advertising - what's the difference?

RTB vs Programmatic Advertising – what's the difference?



Hi, I'm James and I'm Head of Display here
at Jellyfish. In this Insights video, let's have a look at the two seemingly interchangeable
terms – RTB and programmatic – and let's explore what the differences between the two are.
So RTB, as I think we all know by now and we've certainly document in these videos a
few times, is real-time bidding. That's the method of buying display advertising, evaluating
each impression on its own merits as it becomes available to a website. So there's absolutely
no pre-buying in this world, and that's the real-time element. The bidding obviously is
the fact that an auction is held for each of those impressions as they become available.
So no pre-buying, access to literally hundreds of thousands of websites, and we refer to
that now as buying on the open exchanges. There's no barriers to entry. You could press
the machine button, and it will start to execute as you've set it up as you've targeted to
go and do so. No problem, that's great. Programmatic, on the other hand, is just an extension of
RTB. It's a progression. It's a term that we've used to tie a couple of things together.
So RTB, no barriers to entry, open exchange buying, but we still want to sometimes go
and buy specific bits of inventory. That's where the programmatic element comes in. So
we use something called PMPs. Forgive my whole industry for using another acronym, but that
stands for private marketplace. What that is, is it basically mimics a direct buy that
we do with a publisher, but it executes it through our RTB technology. So it's this ability
to look at impressions on an individual basis on inventory that we've kind of optioned or
reserved directly with a publisher. It's the technology behind the scenes that ties all
this together. So how would you target a PMP, or what would you buy? Well, the most common
way of targeting is, as I said, individual websites actions. So if we're delivering a
trainer campaign, we know fpr our kind of trainers, there's a massive affinity with
The Guardian's audience. We want to hit them vaguely in the right context. So while we're
doing some awareness and prospecting for this trainer brand, we'll ask The Guardian to have
a right to buy sports section only of their paper or their website even. What happens
then is, as those impressions in the sport section of The Guardian become available,
on the open exchange buying, by the way, you can't target by sections of sites. You can
only target by domain. So to get deeper than that, we need to use the private marketplace.
So as those impressions in the sport section become available, we get an indication with
that impression that is unique to us and only known to us. We translate that as, "Oh, this
is part of the sports section of The Guardian. Oh, yeah, we really want to buy that from
our prospecting budget. Let's do it." That's the key way. We also use private marketplaces
to buy certain audience segments of The Guardian. So say I want to buy people that spent a lot
of time on the sports pages of The Guardian, but also elsewhere I want to buy them across
The Guardian site, I can do that in a PMP. Or if I want to use a lovely bit of juicy,
creative format, which isn't readily available through the open exchanges, a private marketplace
can be a method to do that. RTB on the other hand, how we use that and how we target it.
Well PMPs definitely work for awareness for brand work and sometimes for the prospecting
activity in the mid-funnel. RTB comes into its own for prospecting work sure, because
there's many, many ways that we can target and segment and execute that buying, but also
for re-targeting because we all know and love that and it's where RTB does come into its
own. For RTB, because we're re-targeting, we already know that we really want to buy
people that have been to our trainers website. Great. So we've narrowed down with the inventory
by that. How does our algorithm start? How do we buy? Well, we use the computer a little
bit for this. So we just set up some targeting options. The algorithm looks at the website,
the exchange, the time of day, the month of the year, the day of the week, all of those
things that we know and love. It also looks at about 80 other data points which are far
more discrete. They can be the operating system of the device, the browser, the version of
the browser, the language settings, the geolocation, although that's quite an obvious one. There's
about 80 of these, as I said. Some of them seem totally irrelevant when you get told
what they are, but because the machine is evaluating billions of impressions and buying
millions of impressions, sometimes it can start to spot discrete patterns that actually
influence how much it wants to pay for that impression, which can help bring in campaigns.
When we're re-targeting, hopefully within a CPA goal, and when we're prospecting, then
it helps find exactly the right audience. So that's the difference between the two.
Programmatic is an extension of RTB, incorporating some direct buying methodologies, but still
taking advantage of this individual impression buying. That means that we get much, much
more efficient campaigns ultimately. It's a wonderful thing both for you and I. Thanks.

9 thoughts on “RTB vs Programmatic Advertising – what's the difference?”

  1. I think the acronyms aren't dissimilar from "legalese" where you have a whole industry of people overcomplicating something simple (perhaps not even on purpose) and making it seem far more technical than it is.

  2. Nice talk. Both RTB and PMP are under programmatic buying… it is worth mentioning automated guarantee and unreserved fixed are the other two

  3. It was my understanding that though PMP is quite defined, "Programmatic" is an even broader term that effectively means automated selling and often automated buying as well.  Thus, by that definition, we could say that RTB is a type of Programmatic as is a PMP…

    It's kind of like asking, what's the difference between a publication and a newspaper?

    Good spiel, though.  You obviously know a lot about the technologies.

  4. James Bourner, our Head of Display talks about the difference between RTB (Real Time Bidding) and Programmatic display advertising #ppcchat  

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