Deciphering the difference between programmatic advertising and real-time bidding

If you’ve ever found yourself trying to untangle the differences between the programmatic advertising and real-time bidding, you’re not alone.

If you’re in the digital advertising industry, then you’ve definitely heard of programmatic advertising and real-time bidding (RTB). If you’ve ever found yourself trying to untangle the difference between programmatic advertising and real-time bidding, then you’re not alone.

After all, there are so many similarities between programmatic advertising and RTB, that once you’ve unraveled all of the differences, it can be difficult to fully understand what really sets them apart.

In this article, we’ll dive into just how real-time bidding differs from programmatic advertising.

How are programmatic advertising and RTB similar?

First, let’s discuss what makes these reflect one another:

What is programmatic advertising?

Programmatic advertising, also referred to as programmatic ad buying, is a technology-based system designed to deliver efficient results. Advertisers define audience metrics, like demographics and user behavior, and use the technology to reach their desired audience at the most opportune time.

As a result, advertisers see better conversion rate and publishers win, too.

So, then what is RTB?

Real-time bidding means ad inventory is bought and sold per impressions via a  computer-aided instant auction. To put this into context, when a user lands on a web page, the information from that page is passed to the ad exchange. Ad placement goes to the advertiser with the highest bid and the ad displays instantly.

Both RTB and programmatic ad buying use multi-channel buying trends, user behavior and fast-processing. Advertisers must make quick decisions based on audience targeting and placement.

So, what is the difference between programmatic advertising and real-time bidding?

If, while reading this, you’ve thought to yourself how similar the two sound: you’re not wrong. The differences between programmatic advertising and RTB are subtle.

Think of it this way: RTB is a type of approach to programmatic advertising. There are many different kinds. Programmatic advertising, however, does not always use RTB.

If you’ve followed along so far, great!

It’s best to think of RTB as a branch of programmatic ad buying. There are many other programmatic methods, such as Private Marketplace, Automated Performance or Spot Buying. You can learn more about the different programmatic types here.

As buying channels continue to evolve for a better connection between buyers and sellers, it’s not only best to understand the differences between them, but to maintain efficiency for better buying processes.

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