Book Report of DSP/RTB Audience Marketing (Ryuji Yokoyama, Kenichi Sugawara & Yoshiteru Umeda)

I’ve recently joined one of the BIG 4 Ads Agencies’ Tokyo office. In the past 4 years, I’ve mostly contributed as an in-house marketer. Although our team has worked on many paid advertisement campaigns (both on and offline), the agency world is still quite mysterious to me.

Luckily my senior recommended a book covering the basics of DSP/RTB Audience Marketing to me. It was an amazing read, especially seeing the DSP/RTB system from a marketer’s point of view.

Here is my book report of An Introduction to DSP/RTB Audience Marketing* (NEXT PUBLISHING), written by Ryuji Yokoyama, Kenichi Sugawara & Yoshiteru Umeda.
*Name in Japanese: DSP/RTBオーディエンスターゲティング入門

Basic Value Chain For the DSP/RTB Ads Industry:

Advertiser -> agency -> trading desk -> DSP -> ad exchange -> ad network -> SSP -> publisher (media company) -> audience.
For DSP-focused roles, there are DMP (data management platform), data aggregators, data suppliers, creative optimization, and third-party distribution servers involved.

I know there might be many unfamiliar terms in the value chain overview above, let’s dive into more details below.

In traditional ads, like those in magazines/newspapers, advertisers can not track results until the campaign is over, this creates delay. Furthermore, traditional ads can not be paused nor provide real-time tracking data like the number of impressions.

As for DST/RTB/SSP, these platforms act like a stock market for ads space (inventory). Unlike the traditional ads where the inventory is limited, DSP (demand-side platform) can bid for inventory from SSP (supply-side platform), which allow advertisers to send ads to almost anyone who has a screen.

For an available ad space (e.g. an impression in a sports magazine), advertisers judge the value of that impression by the magazine’s attribute, the visitor’s info/behavior, etc., and make a bid through the DSP to the one impression, SSP will then respond to the bid.

Since this transaction happens in real-time and there are multiple bidders for the same inventory, this makes sure that the impression will be given to the highest bidder, which generates the maximum income for the one impression (great for the sports magazine).

Likewise, for the advertiser who made the highest bid. First, their bid is based on all factors sent back from the SSP, then analyzed with its own database. Because the analysis (which happens almost in real-time) suggests that this person will be a good match to its offering, it then adds up the bid price and therefore won the bid/impression.
In short, they bid higher to capture a potential customer.

Instead of purchasing a whole page of a magazine or one month of banner space in a webpage, advertisers can start from even ONE single impression. This gives them a much bigger room for maneuver and most importantly, more precise targeting. This changes the practice from a whole frame of ad space to the data analysis and finally to the audience.

3 STEP Framework: Awareness (let people who are not aware of the brand know the brand), Consideration (let people who know the brand want to purchase the brand’s product), Conversion (let people want to purchase the brand’s product actually convert).

In each of the 3 STEP processes, different ad creative and strategies should be implemented.

For people who are already in the consideration stage, why don’t the company’s ad effort focus on that segment? This should be the most cost-efficient way of boosting actions right?
Yes, for people who are already in the consideration stage, it is much easier (cheaper) to help them convert, but how many people are out there considering your company’s product? Without any awareness campaign, how many people in the same segment will still be there in the next year?

The reason being a company should always be focusing on GROWTH, by focusing only on the easiest segment, doesn’t help the firm to gain more audience in the long run.

Although in terms of cost or CPA, awareness campaigns may not compete with conversion campaigns, they are essential for the healthy growth of the company.

Another risk of not focusing on launching the company’s own awareness campaign is that your audience size is dependent on the market size.

This book also introduced the functions of the DST/RTB/SSP platform function and its situation in Japan as of 2012.
Many have changed and I look forward to exploring the newest strategies in my new role!

Author Profile:

Tong Jin is the funder of the Non-Profit Group NSG and an MSA candidate at Gies College of Business.
He’s currently based in Niseko and working as the Engagement Manager at Kinesso — IPG.