What is Real Time Bidding (RTB)? How Does RTB Work?

Real Time Bidding (RTB) technology to trade the ad inventory on an impression basis through programmatic auctions.

RTB technology helps the advertisers to bid on an impression and ad will be served on the publisher’s website if the bid is won. The bidding process will happen in milliseconds where multiple advertisers will bid for the available impressions through Ad Exchanges.

The Advertisers and publishers will connect to Ad Exchanges using the Demand Side Platform (DSP) and Supply Side Platform (SSP) platforms respectively. These platforms will allow the advertisers search for the relevant ad inventory with competitive price to promote their products and services. Similarly, the publishers will be able to fill their ad inventory through ad exchanges from the premium advertisers maximize their revenue.

Real Time Bidding (RTB) is a part of programmatic media buying process. RTB refers to a practice of trading ads in real time on per impression basis in an instant auction. The RTB transaction will be facilitated by the DSP, SSP and Ad Exchanges.

RTB demand is huge in the programmatic buying as most of the advertisers and publishers have opted in for RTB to optimize their buying and selling process via ad exchanges. RTB meaning a real time business for both the parties where they can select the inventory and advertiser according their requirement using the platforms.

How Does RTB Work?

Before we get into the details of how does Real Time Bidding works, we would suggest that you go through this Programmatic Advertising article if you are discovering this topic for the first time. This article will help you understand the basics of programmatic advertising and how it is connected to various parties through technology.

How Does RTB Work?

Real Time Bidding is an auction where ad impressions are sold and bought in a millisecond using the technology platforms. The ad will be served on the publisher’s web page once advertiser wins the bid through auction.

Ad Exchange will help the advertisers in selecting the right ad inventory to promote their products and services to the right set of audience on the selected publishers. This is auction model provide a control over bidding the price on each impression by targeting the right audience.

RTB Process:

  • User visits the web page, an ad request will be sent to Ad Exchanges to search for the relevant ad to serve based on the user data sent.
  • Advertisement
  • The bid request contains the user information such as demographic data, user location, high level browser history, etc.
  • The ad exchange will review the information received through ad request and send the ad call to relevant advertisers to participate in the auction.
  • The selected advertisers will participate in the RTB auction and compete themselves to win the bid. The highest bidding advertiser will win the bid and get a chance to serve the ad on the publisher website.
  • This process will repeat every time to ad slot or ad unit is refreshed. This process will take less than 100 milliseconds from ad request to serving the ad on the publisher’s website.
Why RTB is important in Programmatic Advertising?

The RTB technology is effective for both the advertisers and publishers.

Advertisers: The RTB technology help the advertisers in streamlined, efficient and targeting ad inventory buying. RTB provides a control over selecting the desired audience and focus on relevant inventory to maximize the return on investment. This will ensure that the users will be seeing the relevant ads when they are browsing the websites.

Publishers: RTB will help the publishers to maximize the review and increase the fill rate by allowing the wide range of buyers to serve the ads through competitive auction. Also, this will create a visibility to see who buying the inventory on their website. The publishers leverage this data to maximize their revenue by increasing the price for their premium inventories.

Conclusion: Real Time Bidding (RTB) is technology which connect the advertisers and publishers via ad exchanges to trade the ad inventories in a real-time. The RTB has been incorporated in most of all the ad servers complete the multiple transactions in milliseconds and increase scope of maximizing the ROI and revenue effectively. This technology is also helping the users to see the relevant ads when they are browsing the websites instead of seeing irrelevant ads.

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