Real Time Bidding (Ad Exchanges) Changing Marketplace

"Publishers generated significantly higher revenue from real-time bidding campaigns in comparison to non-RTB campaigns, across all advertising verticals, by an average of 64%, according to a new study by PubMatic. It also found that RTB outperformed traditional run-of-network non-RTB media buying methods by an average of 749% and that audience targeted non-RTB campaigns outperformed run-of-network non-RTB campaigns by an average of 324%. Visit PubMatic after Oct. 18, to download a copy of the report," according to MarketingVox.

Here's a great description of real-time bidding that appeared in the NYTimes:

Now, companies like Google, Yahoo and Microsoft let advertisers buy ads in the milliseconds between the time someone enters a site’s Web address and the moment the page appears. The technology, called real-time bidding, allows advertisers to examine site visitors one by one and bid to serve them ads almost instantly.

For example, say a man just searched for golf clubs on eBay (which has been testing a system from a company called AppNexus for more than a year). EBay can essentially follow that person’s activities in real time, deciding when and where to show him near-personalized ads for golf clubs throughout the Web.

To be clear, the search engines do not provide real-time bidding. Google, Yahoo, and Microsoft own ad exchanges that work with ad networks. The ad exchanges, essentially algorithmic software, place the ads.