What is Real-time Bidding?
Real-time bidding (RTB) is the process in which digital advertising inventory is bought and sold. Brands can use RTB to evaluate and bid on each available impression.
If the ad slot’s constant price in the market is $5/10s for example, we want to turn the constant into a variable. So, we need to know how much a 10s ad slot will cost?
In short, the idea of RTB is that brands compete over the ad slot, and the brand that offers a higher place is going to have the ad slot and display its advert on the retailer’s in-store screen.
How is Revenue Calculated?
1. First, you need to calculate the Total Available Media Inventory (TAMI) per STORE.
TAMI is the number of advertisements or amount of ad space a publisher has available to sell to an advertiser.
If a store opens from 9 AM till 9 PM, has 4 screens, and 1 ad slot is for 10s, How many ad slots will be available?
Now, we want to calculate the TAMI per RETAILER
Following up with the same example:
The retailer has 200 stores, for example.
All of them have the same 12 opening hours.
And the same number of 4 screens.
2. Calculate the CPM (Cost Per Mille=Cost per 1000 impressions)
3. Expected Ad Revenue
With RTB, the CPM won’t be fixed, it should increase, as brands will be bidding on the ad slot with higher prices. So, instead of a $7 CPM, it could rise to $23, increasing the retailers’ revenue even more.
Part of the ad slots is dedicated for the retailer to advertise for its own products, services, discounts...etc. For example, there may be an offer on a free car wash during a specific hour.
So, 70% of the ad space is for brands, and 30% is dedicated to the retailer’s own in-house ads.
But, what if the retailer’s ad spaces are not used, and they do not have anything to advertise about during a certain period. This will prohibit extra revenue, right?
This is when the Inventory Optimizer’s role comes.
Inventory Optimizer detects that the in-house ad spaces are not utilized, so it simply adds those slots to the brands’ inventory to compete over.
And then they are used for in-house ads once they are needed again.
Circle K is a worldwide forecourt retailer with 15,000 locations that experienced a significant uplift in sales after implementing Intouch’s solution.
If you want to optimize your ROI and experience the perks of Real-time Bidding yourself, get Intouch now!