RTB

Real-Time Bidding

A key component of programmatic advertising in the digital advertising ecosystem. RTB is an automated process that allows advertisers to bid on ad impressions in real-time, on a per-impression basis, through a programmatic instantaneous auction. Here’s how RTB works:

1. When a user visits a website or app that has ad space available, the publisher sends an ad request to an ad exchange or supply-side platform (SSP).
2. The ad exchange or SSP then sends a bid request to multiple demand-side platforms (DSPs) containing information about the user, the ad space, and the minimum bid price.
3. The DSPs analyze the bid request data and determine whether to bid on the impression based on the advertiser’s targeting criteria, budget, and other factors. This process is automated and happens within milliseconds.
4. If a DSP decides to bid, it submits a bid response to the ad exchange or SSP, specifying the bid price and the ad creative to be displayed.
5. The ad exchange or SSP conducts an auction among all the bid responses received and selects the winning bid, typically the highest.
6. The winning ad is then served to the user on the website or app, and the advertiser is charged based on the auction price.

RTB has several advantages for advertisers and publishers:

• Efficiency: RTB allows advertisers to reach their target audience more effectively by bidding on impressions that meet their specific criteria.
• Granular targeting: Advertisers can target users based on various factors, such as demographics, interests, and behaviors, at the individual impression level.
• Cost-effectiveness: RTB enables advertisers to optimize their ad spend by bidding only on impressions likely to drive desired outcomes, such as clicks or conversions.
• Increased competition: RTB creates a more competitive marketplace, as multiple advertisers can bid on the same ad inventory, potentially leading to higher publisher yields.

RTB has become a standard practice in the programmatic advertising industry, powering a significant portion of digital ad transactions.

• Abbreviation: RTB