Bidding is a competitive process in which two or more entities try to outbid each other by raising the amount they are willing to pay. It is used in a variety of ways, from auctions to government procurement.
For example, Google runs an auction billions of times every month to ensure users find ads that match their interests and advertisers connect with potential customers at the lowest cost.
Advertising bids
In the advertising world, bids are what you pay for ad space. They vary depending on how much you are willing to spend and what type of campaign you run.
Typically, advertisers will set their bids on ad keywords to target users who are likely to click on an ad. Bidding can be done manually, or automatically through Demand-Side Platforms (DSPs), which also help you track your ad performance.
Advertisers can set their bids to target users by location, browser history, and other specific criteria. This helps them ensure that ads are delivering the most relevant content to their customers.
Ad impressions are then auctioned off in real time to advertiser/buyers who place their bids in a blink of an eye, with transactions taking place within a matter of 100 milliseconds. This process allows for an efficient ecosystem and allows advertisers to sell ads across many networks at once, while publishers save money on their ad inventory.
Auction based advertising
Auction based advertising is a method of buying digital ads via programmatic (real-time) bidding. This method enables advertisers to bid on their preferred ad positions and target specific users with ads that are most relevant to them.
Ads can be shown to people based on a variety of factors, such as ad quality, ad ranking thresholds, context and more. It is an effective way to reach people who are most likely to click on your ad and perform a desired action, such as purchasing a product or service.
The auction model is a popular choice for both publishers and advertisers. It allows for more targeted advertising and higher ROI. However, auctions are not for everyone.
Auction based marketing
Auctions are forums that bring together multiple buyers to compete for assets like livestock, homes, and property tax liens. They can be held in person or online.
In a real-time bidding environment, publishers sell inventory via an auction, with advertisers bidting for space between game levels. In a split second, the highest bidder wins the ad position.
RTB is a faster, more efficient way to buy advertising, and offers a higher ROI for both publishers and advertisers. For advertisers, it means more streamlined, targeted buying, which leads to users seeing more relevant ads.
For publishers, it means opening inventory to a larger audience and gaining visibility into who is buying what. It also lets them charge more for premium placements and prioritize specific deals and inventory, which can lead to higher revenue and fill rates. For advertisers, it allows them to more easily fine-tune targeting and target audiences on a per-impression basis. It can also speed up ad deployments and allow for more flexible campaigns.
Auction based ad buying
In auction based advertising buying, ads are bought and sold in milliseconds by matching the right ad with the right space. All the parties involved – advertisers, publishers and ad platforms – collaborate to ensure that ads are displayed to the right internet user at the right time and place.
Ad buyers use ad exchanges or demand side platforms (DSPs) to submit bids on ad space. Publishers make their ad inventory available on a supply side platform (SSP) that accepts bids from multiple DSPs and then displays the ad to users.
Publishers also benefit from real-time bidding by controlling the floor price for their inventory. This enables them to extract the exact value of their remnant ad units and test ads for better ad unit placements and targeting options.
Using an auction to purchase ad space is the fastest way to sell ad inventory in real time. However, it also increases page load times and can cause ad serving issues if too many auctions are running simultaneously. Hence, it is important to optimize your site for speed while running auctions.