RTB vs Programmatic; what's the difference?

| 29 Apr, 2014

Head of Display James Bourner has a look at two seemingly interchangeable terms - RTB and programmatic - and what the differences between the two are.

Video Transcript

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.


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