We understand it can be quite confusing and challenging for marketers to choose between RTB and Direct channels for running a successful online display ad campaign. Even though the ultimate goal is to place your ads on an online platform where they reach the maximum number of high-intent audiences, the processes for both are completely different, and each has its own pros and cons.
It depends on various factors to rate one better than the other. But the truth is, there is no one-size-fits-all answer. However, depending on your goals, GEOs, formats, and level of experience, both have distinct advantages and drawbacks.
What Is The Difference Between RTB & Direct Buys?
Real Time Bidding (RTB): It is the process of buying programmatic ads using automated auctions in real-time. You can define bid limits and targeting, and then let the system compete for clicks and impressions. The OpenRTB enables the exchange of communication and performs digital transactions over real-time auctions. To know more about OpenRTB, read this blog on: How OpenRTB Boost Ad Results and Performance for Advertisers?
Key features: Scalability, fast optimisation, granular targeting, and dynamic pricing (bidding per impression or click).
Direct Buys: For direct buys, marketers directly connect and negotiate with the publisher or platform by setting up fixed pricing through CPC or CPM to reserve their listing. This involves a lot of manual effort.
Key features: Fixed rates, premium ad slots, predictable spends, and guaranteed placements.
RTB Vs Direct Buys: What’s Better?
We have done our research and analysis to help you decide which method is ideal for you. We'll first compare some of the differences between traditional direct buys and RTB, as well as what they mean to brands, agencies, and marketers.
Targeting
Direct Buys
Direct buys are simply large purchases of impressions to ensure that your advertisements are viewed in a certain context or on a specific website. You can use targeting factors like region or browser type to narrow down the audience that sees your advertisements, but you're still ultimately targeting them to a certain website.
RTB
During the auction process, RTB profiles and evaluates each impression in milliseconds. You can target ad viewers based on demographics, psychographics, and behaviours, but RTB's reach allows you to do so across multiple sites rather than just one, allowing you to target people on a large scale.
Recommendation
Depending on the goal of your ad campaign, you need to decide which one to go for. However, in order to make your ad reach a larger audience, go for RTB. With RTB, you can also adopt a more flexible approach to campaign optimisation because each impression is purchased separately, resulting in more efficient performance and control.
Traffic Supply
Direct Buys
This is a guaranteed approach to get traffic supply for what you have booked. Here, you’re committed to purchase a large amount of ad inventory at a fixed CPM rate, which the publisher will deliver in the future. In this regard, the inventory is "guaranteed" or "reserved" for you. Barring any unforeseen circumstances, you will receive the impressions you committed to purchase at the start.
RTB
In an RTB auction, you will bid with a large number of other advertisers, all bidding at different rates for each impression in real time. The ad inventory is non-guaranteed due to the marketplace's unpredictability and volatile environment.
Recommendation
Direct buys are suitable for advertisers who have defined exposure goals and require a high level of guarantee to deliver their ad campaigns successfully. Guaranteed buys normally take precedence over RTB. This means that as the demand for guaranteed inventory on a certain site rises, the supply available on RTB for that site falls.
Workflow
Direct Buys
Direct buy is a manual process that requires hours of planning and execution. Your team needs to reach out and make initial contact with the publisher's sales team; negotiating and planning the "insertion order" for the ad campaign, emailing ad tags back and forth, and so on are all part of the launch preparation process.
RTB
RTB is a programmatic process that relies on user interfaces and algorithms rather than manual conversations, emails, and contracts. There are still some manual efforts required, though, such as ad quality review, technical support, and billing.
Recommendation
Direct buy involves a lot of manual processes and also has the complexity of management to run the campaigns. In contrast, RTB is a fully programmatic process to control and manage campaigns, reporting, and optimization, making it easier and also saving time.
Pricing
Direct Buys
Direct buys are typically priced in fixed CPM rates, which means that the inventory is sold in bulk and all impressions are essentially priced the same. This pricing mechanism has been the standard since the banner ad's creation, and it does not appear to be changing anytime soon.
RTB
RTB auctions off each impression. Because each impression is charged individually (and a cost-per-impression metric would be incredibly unrealistic for advertisers in terms of reporting), effective CPM or eCPM is the de facto statistic for RTB pricing.
Recommendation
This distinction derives from the fact that direct buys purchase impressions in bulk, whereas RTB bids on individual impressions separately. With direct buys, you pay a certain fee for each batch or ad inventory and get varying levels of quality within it. Whereas for RTB, the overall cost of the inventory will be a dynamic figure calculated from all the individual prices you paid for each impression. Therefore, if advertisers are looking to pay for quality, RTB is the better option.
Accessibility
Direct Buys
A large minimum ad spend is required by most publishers to start with direct buys. A direct procurement of guaranteed merchandise typically requires a commitment of $5,000-10,000.
Larger publishers with appealing inventory will not pay attention unless your budget is at the 5- to 6-figure level. For many small- to medium-sized marketers, this may be a nonstarter.
RTB
In the case of RTB, even small-scale advertisers can start bidding. There is no fixation of a price range. Advertisers can manage their ad spend as per their budget, yet get quality traffic due to the auction among a vast range of audiences.
Recommendation
Compared to direct site buys or buys through large ad networks, which have higher entry hurdles for advertisers, buying RTB inventory through a DSP (depending on which one you choose) has far smaller financial commitments and operational management. As a result, in a programmatic RTB environment, marketers have significantly greater control and far less friction in the media buying process.
Wrapping Up
The "winner" between RTB and Direct Buys is entirely dependent on your campaign's specific goals and resource allocation. Performance marketing is not a one-size-fits-all game; it is about balancing reach and relevance.
If you want to scale quickly, target specific audiences, and save money through automation, RTB is your best friend. It enables you to gain campaign growth in real time and discover opportunities across the open web that manual transactions simply cannot reach.
The most effective technique is to create a hybrid model that combines Direct Buys for your core, high-performing "evergreen" placements with RTB to test new audiences and grow your successes. Understanding the benefits of each allows you to create a more robust, high-converting funnel that makes the most of your advertising dollars.
If you are looking to optimise RTB workflows powered by real-time data signals or want guidance on quality traffic flow for your ad campaigns, get connected to the experts of 3Mads.