RTB is a form of programmatic buying. In recent years, a growing number of impressions are being sold in real-time bidding (RTB), where advertisers bid for impressions in real-time, as consumers visit publishers’ websites and other online venues such as apps and games. RTB allows advertisers to target consumers at an individual level using browser cookie information, and let them customize their ads for each individual.
There are several important pieces involved in RTB process:
Advertiser - сompany or brand that wants to place an ad online.
Demand-Side Platform (DSP) is the service advertisers use to launch ad campaigns.
Publisher - website that wants to sell ad spaces (ad spots, ad inventory).
Supply-Side Platform (SSP) runs auctions, where ad spaces are instantly purchased by the highest bidder.
Ad Exchange connects companies, who want to advertise and publishers who want to sell ad space. Ad exchanges carry out the bidding transaction automatically in real time by connecting both DSP and SSP.
Bid Request - a piece of code is used to purchase inventory and show ads. It’s made up of a few lines of code that include inventory information, platform information, the amount of impressions and user data access keys (IP, pixels, tags, cookies).
Bid Response - the advertiser's response to a publisher's bid request. When an advertiser decides that ad inventory offered via a bid request suits their criteria, they can respond with a bid through the RTB integration.
Ad Feed - that’s a usual RTB meaning for ad campaigns. Manager of the platform creates an ad feed for advertisers with endpoints (ad link) and necessary targets to run this feed on chosen websites.
Impressions refer to the number of times an ad is viewed. In the real-time bidding process advertisers pay only per thousand impressions (CPM).
Clicks refer to the number of times an ad is clicked. In RTB advertisers pay per one click (CPC).
Traditionally, RTB is an automated process where advertising inventory can be sold or bought on an impression basis (according to OpenRTB Protocol).
The main steps:
1. DSPs are used by Advertisers to set up their ad campaign and track its performance. SSPs are used by Publishers to list their ad inventory and the price they charge. They then go to the ad exchange, where the rtb process takes place.
2. Advertisers set targeting filters/parameters to be more specific on their choice of inventory, which they are going to bid on. As an example, a company/brand plans to target users only who are in the USA and were on their website once. So, advertisers, or specifically their DSPs, assess ad potential in real time and decide if it’s interesting for them to place a bid and how much to bid.
3. A user triggers an ad request while searching the website. Information about the user, available ad format, and other key factors are passed on to advertisers.
4. Advertisers bid based on their interest and how the passed data measures up against their targeting parameters — the higher the demand, the higher the price.
5. When DSP decides to bid, SSP either accepts or rejects the bid. Advertisers pay for the amount of times, per thousand of impressions (CPM), that their ad is seen.
6. When a winning bid is determined, the ad is served to the user. The entire process takes 200 milliseconds.
- For advertisers: RTB means more optimized, targeted and efficient buying. It helps them to focus on the most relevant inventory results in higher ROI. Besides, users see more relevant ads.
- For publishers: RTB increases revenue and fill rates by opening inventory to a wider variety of buyers in a competitive auction. Finally, publishers gain visibility of who is buying which inventory and can leverage this knowledge to charge more for their premium spots.
Real-time bidding makes the online advertisement process fast and easy. Companies can focus on tracking the results, improving statistics of their campaigns and increasing brand awareness at the same time.