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How do you balance the trade-off between scale and targeting in RTB?

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Real-time bidding (RTB) is a form of programmatic advertising that allows advertisers to bid on individual impressions in milliseconds. RTB can offer many benefits, such as efficiency, transparency, and performance. However, it also poses some challenges, such as how to balance the trade-off between scale and targeting. In this article, you will learn what this trade-off means, why it matters, and how to optimize your RTB strategy.

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Joy Ross

Executive | AdTech | Strategic Leader | Corporate Development | Business Builder

1 What is the trade-off between scale and targeting?

The trade-off between scale and targeting refers to the dilemma that advertisers face when choosing how to segment and reach their audiences. On one hand, targeting allows you to show your ads to the most relevant and qualified users, based on criteria such as demographics, interests, behavior, location, and context. On the other hand, scale allows you to reach a large and diverse pool of potential customers, increasing your chances of conversions and brand awareness. However, targeting and scale are often inversely related: the more you narrow down your audience, the less inventory you have available to bid on, and vice versa.

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Joy Ross

Executive | AdTech | Strategic Leader | Corporate Development | Business Builder
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The rules of marketing applied to the use of RTB are critical. Is it a performance campaign or brand metric based outcomes? Defining your measurement tactics prior to spending across the spectrum will allow spend to be maximized to reach specific goals. If you want specifics you use the targeting tools, if you want branding you use the open web.

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2 Why does the trade-off matter?

The trade-off between scale and targeting matters because it affects your campaign performance and return on investment (ROI). If you target too narrowly, you may miss out on valuable opportunities and limit your reach. If you target too broadly, you may waste your budget on irrelevant or low-quality impressions and lower your click-through rate (CTR) and conversion rate (CVR). Therefore, finding the optimal balance between scale and targeting is crucial for maximizing your RTB results.

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Joy Ross

Executive | AdTech | Strategic Leader | Corporate Development | Business Builder
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Marketing practices by Media Traders and buyers or planners need campaign goals outline before spending media dollars. The definition of success various by goals and objectives. Two budgets for separate trading tactics is advisable.

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3 How to measure the trade-off?

One way to measure the trade-off between scale and targeting is to use metrics such as impression share, win rate, and effective cost per mille (eCPM). Impression share is the percentage of available impressions that you bid on and win. Win rate is the percentage of impressions that you win out of the ones you bid on. eCPM is the average amount you pay for 1,000 impressions. These metrics can help you evaluate how competitive and efficient your bidding strategy is, and how well you are matching your audience and inventory.

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Joy Ross

Executive | AdTech | Strategic Leader | Corporate Development | Business Builder
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There are other OpenRTB factors involved such as match rates between a DSP and SSP which would limit likelihood of winning. Understanding the relationship between the supplier and DSP is often overlooked. Have you seen your DSP’s QBR with their SSPs to better understand the health of the piping between the systems?

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4 How to optimize the trade-off?

Optimizing the trade-off between scale and targeting is not a straightforward process, but there are best practices you can follow to improve your RTB performance. Firstly, define your campaign goals and KPIs to adjust your targeting and bidding parameters accordingly. Secondly, use a mix of targeting options to create more refined segments. For example, you can target users who have visited your website, searched for specific terms, or shown interest in certain topics or products. Thirdly, test and experiment with A/B testing or multivariate testing to compare different targeting and bidding strategies. Additionally, use dynamic creative optimization (DCO) to tailor ads to different audiences and contexts. Lastly, monitor and adjust using analytics and reporting tools to track campaign performance and identify any issues or opportunities. You can also use automated or manual optimization techniques to adjust bids, budget, frequency, and targeting based on real-time data and feedback.

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5 What are the benefits of balancing the trade-off?

Balancing the trade-off between scale and targeting can help you reap several rewards, such as improving ad relevance and quality, reducing ad waste and cost, and enhancing brand reputation and loyalty. By targeting the right users at the right time and place, you can increase your click-through rate, conversion rate, and customer satisfaction. Additionally, avoiding irrelevant or low-value impressions can help you save your budget and increase your return on investment. Moreover, delivering personalized and engaging ads can build trust and rapport with your audience, thus encouraging repeat purchases and referrals.

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Joy Ross

Executive | AdTech | Strategic Leader | Corporate Development | Business Builder
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Understand the systems that are being used are a critical factor to a campaigns ROI. There could be hidden fees, a la carte fees, or uncontrollable margin management involved that a trader doesn’t have control over. Ask for transparent fee structures in your contracts with DSP and SSP providers. Select your SSP(s) to reduce waste and increase effective campaign management.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you balance the trade-off between scale and targeting in RTB?

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1 What is the trade-off between scale and targeting?

2 Why does the trade-off matter?

3 How to measure the trade-off?

4 How to optimize the trade-off?

5 What are the benefits of balancing the trade-off?

6 Here’s what else to consider

Real-Time Bidding (RTB)

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