How the terms RTB and Programmatic are linked

18 October 2017

Two words, RTB and Programmatic, often appear next to each other. How are they connected? Let’s structure the info.

The need for Programmatic Buying

Programmatic is the technology to automate the process of buying media inventory.

It developed, as the industry needed solutions for two main issues – how to put chores on machines and how to find the specific audience for the brand promotion.

  1. Programmatic lets the system overtake part of work that people had performed manually.

This includes:

  • requests,
  • negotiations,
  • insertion orders.

2. Programmatic gives advertisers the audience buying and the data-based targeting. They can select the specific audience to show their ads to, instead of buying ad impressions in bulk.

RTB on the programmatic scene

RTB or Real-time bidding is one of the techniques to buy ad inventory programmatically.

There are other techniques as well. Two types – RTB and Programmatic Direct – are most widely known.

RTB is the method of buying inventory through auctions. Advertisers bid in a real time on opportunities to show their ads.

Programmatic Direct is when a programmatic platform and a buyer decide on a fixed price. Advertisers agree for a fixed CPM and know exactly where their ads will appear.

How RTB and Programmatic Direct are different

Programmatic Direct uses programmatic platforms, but the platforms and the buyers also communicate directly.

Real-time buying implies running auctions. Programmatic Direct doesn’t.

When buyers and platforms agree on a fixed CPM without a fixed volume of impressions, then it’s Preferred Deal. If impressions volume is fixed as well, then it’s Programmatic Guaranteed.

The conclusion?

Programmatic is a structure of buying media ad placements that includes Real-time bidding among other buying mechanics. RTB and Programmatic Direct sometimes appear as alternatives. RTB is the technique of running auctions and Programmatic Direct includes direct negotiations for setting fixed prices.

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