How an ad is served with Real Time Bidding (RTB)

In the ideal world of any marketer, there is one platform for placing ads and one group of leads that immediately convert into payable customers by simply seeing an ad. The reality has nothing to do with this picture because there are millions of ad spot sellers, billions of advertisers, and even more users. So here comes the dilemma: how to make things work and connect the parties in one aligned and smoothly working system?

Actually, there is an answer: programmatic advertising. We have started exploring Real Time Bidding with programmatic advertising because you should first understand the system and then deep dive into one of its processes. So, once again, programmatic advertising is the process of buying and selling ad inventory through data-driven automated technology.

What is Real-time bidding (RTB)?

Real-time bidding is an integral part of the programmatic industry, referring to the practice of real-time buying and selling of ads in a per-impression auction. Of course, it doesn’t look like the auction or stock exchange you have seen, but the principle is quite the same.

How does RTB work?

There are three parties in programmatic media buying:
  • Demand-Side Platforms (DSPs) - those used by advertisers to buy ad impressions as cost-effectively as possible.
  • Supply-Side Platforms (SSPs) - working on the publishers’ side, selling their ad spots as high as possible.
  • An ad exchange - the platform where those two “meet” to sell and buy.

The publisher is the website owner who generates content such as news, music, information, sports, and other entertainment. This content draws an audience, and the publisher sells ad space to advertisers who want to reach that audience upon visiting the publisher’s web page. The publisher ad server may decide to put the space on an open ad market for a better deal, connect to SSPs, and sell the spot. In its turn, the SSP sends the ad request off to an ad exchange, which works on connecting to potential buyers (DSPs). When the bid is closed, the same line goes backward from DSPs to SSPs and publishers who show the ad. Of course, millions more processes are going on between those major steps, and the process may seem too long, but it takes only 10 milliseconds for a user to see the ad. FYI, it takes 300 milliseconds to blink your eye. Unbelievable, right?

Why is real-time bidding important?

Besides being fast and smart, RTB is a highly effective solution for all parties.
For advertisers, RTB offers a more streamlined and targeted buying experience. The technology enables focus on relevant inventory, increasing ROI.

  • Easy media buying
  • Higher performing campaigns
  • Brand protection
  • For publishers, RTB is a chance to increase revenue, manipulate rates by opening inventory to more buyers, and gain visibility.
  • Accurate pricing
  • Control through SSPs
  • A better understanding of customer needs
  • Private marketplaces
  • High-performance direct sales

Do you want to start with programmatic advertising?

Real-time bidding, programmatic advertising, and the whole ecosystem are complicated and packed with terms and strategies. Those are well managed by professionals, but beginners may easily get lost in this world. It was just a tiny part of everything relating to programmatic advertising, so stay tuned for more stories.