What Is Bidding In Digital Marketing

October 20, 2022
What Is Bidding In Digital Marketing

The word “bidding” is quite popular in the digital marketing industry, referring to a critical factor in running successful ad campaigns. Bidding is also directly related to effective digital marketing strategies, raising brand awareness, and boosting sales and lead generation.

So, let’s learn in the following guide about bidding in digital marketing, including what RBT means and other related factors!

Bidding in Digital Marketing

Before understanding bids, it is important to consider various factors involved in running a successful ad campaign. These might include:

  • Targeted audience
  • Marketed channels
  • Marketed content

Now, bidding is the maximum amount of money you are willing to pay for an action, primarily for each click on an advertisement.

The more pay per clicks you buy, the larger audience it will reach. It means finding more people interested in your products/services or ensuring the boosted content is delivered evenly throughout the campaign duration.

However, note that bidding on a particular post or content is not common, as experts like to bid on “keywords” to reach a higher audience. This way, your ad appears on the feed when people search for keywords related to that.

The two popular types of bidding are

  • Cost per click (CPC): It is also known as pay per click (PPC) and refers to a billing model where the advertisement charges are charged each time a user clicks on an ad.
  • Cost per 1000 impressions (CPM): It also stands for cost per mille and refers to a billing model where the advertisement charges are charged for displaying the content to a particular number of users, say thousand.

What is RBT in Digital Marketing?

RBT stands for Real-Time Bidding and is an automated digital auction process in online marketing. Like an actual auction where the highest bidder buys the goods or property, advertisers in digital marketing bid on ad space from publishers using a CPM strategy.

Simply put, RBT or Real-Time Bidding is an automated auction processing at the speed of milliseconds every time someone searches something on Google.

The three essential parts of any RBT auction are:

  • Demand-side platforms (DSPs): an online space where advertisers buy ad space and manage their ads, like Google Ads.
  • Ad exchanges: Occur between the publisher (website owners) and the advertiser at an “ad exchange” — where ads are bought and sold to the most relevant and highest bids.
  • Supply-side platforms (SSPs): A platform used by publishers to sell their ad space to advertisers.

So, advertisers buy spaces (sections) on websites to display their ads. When you search for something on Google, an auction occurs if more than one advertiser has placed bids on that keyword.

Note that the auction takes place when the page loads, and Google decides which advertisements will appear in the SERP, where they will appear in the SERP (Search engine results page), and the cost per click that each advertiser must pay.

Final Words

It wouldn’t be wrong to call bidding the gateway to higher audience reach. It influences a digital marketing strategy, from reaching more people to generating more leads and conversions.

You should also keep in mind that bidding and budget go side by side, given the more you are willing to spend, the higher your audience reach can be.


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