Real-time bidding was conceived in December of 2008 at the beginning of the Great Recession. Real-time bidding is used to reach the user most likely to convert for the Advertiser anywhere that user is on the internet. The promise of this new technology during a major economic downturn was to automate the media buying process and to create massive cost efficiencies at scale.
Using this new Programmatic approach to media buying, as opposed to the old manual method of dialing up each publisher to negotiate prices directly, Advertisers were able to explore the notion of being inventory-agnostic for the first time. So much of media buying was, at that time, based on gut instincts and Advertiser-Publisher relationships. Now Advertisers could step back and reconsider the very nature of media buying.
Does it make sense to pay the same price for all ads to all users on a website? In some cases, it might, but certainly not most. With real-time bidding on the other hand, you pay exactly how much that exact person on that exact website at that exact time is worth to your brand. Has that person already expressed interest in your brand? Do they seem close to converting and just need a little nudge forward? Do they “look like” customers who have already completed a purchase with you? If so, bid more. If not, bid less.
The cheapest way to reach potential customers that are most likely to make a purchase is with Retargeting. This is when you show ads to people who have already been to your website in the past. You can set rules like “INCLUDE people who have been to the website in the past 30 days and EXCLUDE people who already completed a purchase”.
More supply and less demand mean MAJOR savings for Advertisers. Right now, the entire world is at home and internet usage is way up. Competition for ad space is dwindling. There’s never been a better time to start a Programmatic advertising campaign… since the last Great Recession.