Category Archives: Digital Marketing

Web2.0 ; Social Media Marketing ; Facebook ; Location Based Marketing ; Mobile Marketing

Understanding Real-Time Bidding in 30 seconds.

According to Wikipedia – Real-time bidding (RTB) refers to the means by which ad inventory is bought and sold on a per-impression basis, via programmatic instantaneous auction. With real-time bidding, advertising buyers bid on an impression and, if the bid is won, the buyer’s ad is instantly displayed on the publisher’s site.

Wow ! That’s a lot of jargon for any non-digital person to understand. Let me try to break this down and share a story around the media content that you consume almost daily i.e. Newspapers.

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Story 1: 

You received a newspaper and see ads on the first page which is same for everyone in your whole town. That essentially is ‘reserved buy’ of inventory.From an advertisers perspective he went ahead and booked the ad space in advance paying whatever was asked by the newspaper.

RESERVED BUY

Story 2: 

You received a newspaper and see ads on the first page which is same for your whole block and ‘could’ be different for the people living in the next block.
In this case the advertisers met at the newspapers office a day before and placed their respective bids for the blocks citing relevance of the audience to their product. Say an advertiser X with the highest bid for your block won to show his ads for your block. This is a regular ‘bidding based auction process’ followed by most. e.g. ‘Google Adwords’.

bidding process in an auction

Story 3: 

You received a newspaper but it didn’t had any ads till the time delivered to your doorstep. As soon you picked it up to read suddenly an ad appeared on it. The same happened with every single person in the town. Everyone had different ads to see, with some having same ad as well. Plus every page that you flip on the newspaper has an ad tailor made for you based on what you did on the previous page – all in the very instant!

The advertisers waited till the last moment for you pick up the newspapers and then decided how much to bid for that individual ad for you, based on your age, gender, location and 10 other things. They waited till the very end so as to gather feedback on who is viewing the newspaper and then show up the desired advertisement. The advertiser X won the bid for you and showed his ad at that very ‘instant’.Similarly this was done for every person of the town in the very instant they picked up the newspaper. This is now called Real time bidding.

oh hell yeah

So as WIKI says – “Real-time bidding (RTB) refers to the means by which ad inventory is bought and sold on a per-impression basis, via programmatic instantaneous auction”

Thus Ad-inventory is the ad space in your newspaper, per-impression is the ad-view by you, and programmatic instantaneous auction is the the real time instantaneous bidding by buyers, competing for showing you their respective ad.

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Now I might have left some details while explaining this answer but largely from a consumer point of view you will just see the ads without actually knowing how they are served.

The challenge for me was to keep it very plain and simple for a layman to understand. In story 2, the auction process is nearly real time instead of a day before and far more complex using 2nd price auction methods. But in essence the bidding is done ‘largely’ without any individual customer feedback loop mechanism like in RTB.

Please do comment if I could have made this more simpler.

Google

facebook_membership

Do you know Facebook now accepts Credit Card Reward points as a virtual currency?

 A recent, small though important development, in the payments arena came to my notice. American express – a leader in closed loop credit card business – has launched a new virtual currency for its merchants & small business owners which can be used on Facebook.

Actually, this virtual currency is nothing new, rather Membership reward points only. Thus Amex card members can use the merchant reward points accumulated on their card account as a virtual currency to buy advertising space on Facebook.

Thus in one shot AMEX has achieved:

  1. A way for its customers (read Merchants/Small Business) to reach 500 million potential their customers via Facebook ads & promote their business. (Already 35 percent of entrepreneurs use Facebook to promote their businesses)
  2. An incentive for its customers to use AMEX services more & more, and thus earn Membership Reward Points.3.  
  3. Customer loyalty & long term relationship
  4. Establishing a relationship with Facebook since they have accepted to redeem AMEX reward points as a virtual currency.
  5. Finding genuine ways to promote business for its customers. It’s a win-win for both Amex & its customers.

A step further in this direction could be the sale of Facebook credits for Membership reward points. Thus any credit card customer could then buy FB credits in lieu of his collected credit card reward points & then use these FB credits as a virtual currency in the Facebook social world.

Facebook_Gifts

Do you play Games on Facebook? Get ready for Facebook Credits.

With over 500 million users worldwide (source: Facebook) & the most dominant & largest social networking platform, Facebook has surged ahead by leaps & bounds. Facebook, with more than 50% control over virtual goods offered in social games on its network, is looking at as a huge revenue stream.
And this is where a new payment stream of ‘Facebook Credits’ will come in picture and add-on to the existing revenue line.

What is this?

While playing games online the players have the option to buy Virtual goods in the game. Virtual goods include weapons, tools, animals, and practically anything imaginable in the context of a social game. The currency used for such purpose is called the In-game currency. This is a virtual currency that a developer creates for use in a specific game or set of games. In-game currency could be “directly purchased by users with real money (i.e. Dollar, Pounds etc.).

Let me try share an example here:
While playing online Mario Bros. Game or Super Contra or Commando (oh used to love those!!) the player can buy an extra life or special weaponry etc. virtual goods. The player needs to pay using the in-game currency. The players can get this in-game currency by paying in real money (via Paypal / credit card etc.) to the game owners directly. Thus Social game developers generate revenue when users purchase “virtual goods” and “in-game currency” during game play.

Facebook Credits is a virtual currency system or an in-game currency system which shall be used by the social gaming audience on Facebook to transact & buy virtual goods in their social games. For example, in the popular Facebook game “Farmville,” players manage a virtual farm by growing crops and raising livestock. Players can purchase virtual goods like tractors. The currency shall be maintained by Facebook.

  

An extension to the Facebook Credits is that users can further use the Facebook Credit outside their games as well to buy Virtual Gifts. A Facebook user can purchase a virtual gift through the “Sending Gifts” application and give it to a Facebook “friend,” who would then have the gift displayed on his or her profile.

Source: Facebook, Send Gift on Facebook, http://apps.facebook.com/sendyougift/

Change is Law

  1. Presently, game developers have the option, but are not required, to use Facebook Credits as their sole in-game currency on the Facebook platform.
  2. Effective July 1, 2011, however, Facebook will require social game developers to exclusively utilize Facebook Credits for the purchase of virtual goods.
  3. Users must purchase Facebook Credits directly from Facebook and then use the Credits to purchase in-game currency.
  4. Users must purchase Facebook Credits from Facebook with a credit card, PayPal, Or a mobile phone.

 

Revenue Potential

  • Developer revenue from virtual goods purchased in social games in the U.S. totaled $865 million in 2010, and is expected to hit $1.25 billion in 2011.
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  • Facebook Revenue shall be a 30% of the developer revenue as game developers must pay a 30% service fee for all Facebook Credits purchases.
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Whats in store for the Future?

Mark Zuckerberg, the Chief Executive Officer of Facebook, has said that the company plans to do “a lot more” with Facebook Credits.

  1. One option is of developing it into a system for micropayments open to any type of application on Facebook.
  2. Thus Facebook Credits can be applied towards other online media products, or non-gaming digital goods, such as pay-per-view movies, TV, music, and news articles.
  3. Facebook Credits can eventually become a payment method outside of Facebook, usable for purchase of virtual goods on other platforms.
  4. Facebook will provide users with free Facebook Credits to watch advertisements for which third parties pay Facebook

Thus the future seems to all virtual. This is really astonishing where someone has created a virtual currency & virtual goods & virtual games, and real people are using real money to buy them to have real fun.

Is there anything you have to say about this?