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Real-time bidding (RTB) is the process by which companies buy and place ads online through automated auctions. Real-time bidding takes the work out of advertising by making it possible for advertisers to place hundreds and thousands of ads online, often in less than a second, without needing to individually reach out to online publishers.
Let's say Silk is a UK-based beauty brand that just launched a new brow line and is running a campaign. They set up their campaign on a Demand-Side Platform (DSP) and are targeting users who regularly shop for makeup products, are located in the Manchester area, and are between 18 to 30 years of age. The brand also wants its ads to only show on sites related to beauty and lifestyle.
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With RTB technology, brands can automatically place ads in relevant spaces without much effort. Using their DSPs, they set up their targeting requirements. The DSPs select suitable impressions on open auctions, bid on them, and purchase. Aside from being a huge time saver, RTB makes paid marketing campaigns more productive and cost-effective by letting advertisers to: Minimize the manual labor involved in online advertising and hire a smaller team. Get access to the biggest selection of digital ad spaces and formats on the web.
Faster speed: Thanks to the bidding and advertising process taking less than a second to complete, advertisers get instant feedback on what’s working (or isn’t) and can optimize as needed.
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Still not sure whether you should sell website or buy ad space through real-time bidding? We go over the pros and cons below.
As its name implies, a DSP is driven by the demand side of the advertising equation: Advertisers seek inventory that will help them reach the right audiences at the right time, within a defined budget.
A typical transaction begins with a user visiting a website. This triggers a bid request that can include various pieces of data such as the user's demographic information, browsing history, location, and the page being loaded. The request goes from the publisher to an ad exchange, which submits it and the accompanying data to multiple advertisers who automatically submit bids in real time to place their ads.
” Real-time bidding allows advertisers to automatically buy ad inventory, place the ads online, and get a certain number of impressions in their programmatic advertising campaigns.
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In RTB programmatic, the RTB auction is the core process. It ensures that the highest bidder wins an ad impression on the publisher’s media. It's also called an open auction since any publisher and advertiser can participate in it. The platform that hosts open auctions is called RTB exchange or ad exchange. It communicates with supply-side platforms (SSPs) — software used by publishers, and demand-side platforms (DSPs) — software used by advertisers. From SSPs, ad exchanges collect data about impressions available for sale in the form of bid requests. From DSPs they solicit bid responses showing how much companies are willing to pay for their banner or video to appear on the suggested ad space.
It’s important to note that advertisers don’t pay for each individual impression. Instead, publishers charge based on eCPM, or the cost per thousand impressions.