With automation taking the digital advertising industry by storm, it’s never been more important to know how the bidding system works.

What is biddable media?

Biddable media is any form of online media that is auctionable – in real time – and usually serves as the alternative to arranging and paying upfront for a tenancy or reservation. 

With the explosion of automated trading within the display marketplace and the continued growth of pay per click on search engines like Google, biddable media is big business and a cornerstone of performance marketing.

How does it work? 

In a typical transaction, media, or inventory, is traded on a per-action basis via a third-party ‘marketplace’, which may consist of multiple advertising networks working on behalf of advertisers and publishers.   

Bids are made automatically, based on live information around what buyers are willing to bid, so the whole process is virtually instantaneous. If a bid for inventory is won, the buyer’s ad will be displayed on the publisher’s site in real time. 

A key perk of using biddable media is that purchasing can be continually optimised based on the success or failure of placements. That means if a campaign is performing well, a higher bid can be placed to gain more exposure for the ad. 

Where can I access it? 

Biddable media is available within a number of online marketing channels, with a particularly strong presence in search and display advertising, although the nature of each channel means their uses are often very different.  

Google Adwords (paid search text ads) allowed some of the first examples of biddable media to enter online advertising, enabling companies to bid on keywords on a pay-per-click (PPC) payment model. 

The ranking of ads on Google’s search results page is determined by how much advertisers bid for the keywords which trigger them, and is based on the results of auctions that keywords initiate. 

Through the development of complex technology, such as demand-side platforms (DSPs, which you can read more about here), and using the same tags and conversion tracking that search uses, display is now a major area of biddable media. 

This reduces the high cost of going direct to a website to place an un-targeted ad, on a cost-per-mille (CPM) basis. Advertisers can instead place a cap on how much they are willing to pay, based on the returns generated and reported by tracking code, whether that’s impressions or click-throughs. 

The future of biddable

Biddable media is no longer exclusive to ‘traditional’ online advertising. Programmatic TV is on the rise, allowing advertisers to bid on live video inventory based on audience data gathered through device ID, cookies and IP addresses. You can read about Sky’s endeavours into this area here

Although advancements in online and data are making the process of bidding on media much more of a possibility within out-of home advertising, such as electronic billboards, the current lack of audience data, and inability to track ROI, represents a key barrier. 

Read more from our Basics series.