Real-Time Bidding (RTB) and How It Works

July 21, 2021 Real Time Bidding (RTB)

Real-time bidding (RTB) is quite an important part of programmatic advertising. This technology has had a major effect on online advertising in general. It forever transformed this market and the ways digital advertising is bought and sold. 


Despite RTB being of such importance, there is still confusion even among people who work in the digital advertising industry. Which isn’t surprising as we know better than anyone how inherently complex and turbulent adtech as a field is. Even though RTB has been mentioned in previous articles multiple times, when we were talking about the ad tech stack, ad viewability, shadow banning and so on, it was never in the center of our focus.


So today we are going to take a closer look at RTB, what this technology is all about, how it works and why it is considered to be so important to the programmatic ads market today. 


What is Real-time bidding (RTB)?


Real-time bidding is a practice of buying and selling ads on a per-impression basis via instantaneous programmatic auctions. It is similar to the ones facilitated during stock market trading. RTB is a part of programmatic media buying and is typically conducted using supply-side platforms (SSPs) or ad exchanges


Supply-side platforms (SSPs) do for publishers and ad sellers what DSPs (demand-side platforms) do for advertisers and ad agencies, helping them to manage the sales of targeted ads on their websites and apps. SSPs normally offer a number of programmatic ad tools for ad sales optimization, such as header bidding and other types of automated real-time ad auctions. 


Ad exchanges are focused on connecting publishers with ad inventory to advertisers and ad buyers. They allow advertisers and publishers to trade directly on their marketplaces, and RTB, enabling real-time auctions, is the key technology behind this process. 


Why is Real Time Bidding important? 


RTB is such an important technology in modern-day digital advertising because it plays a valuable market-balancing role. The comparison of RTB to stock market trading is relevant because they serve the same purpose of determining a fair price by comparing demand with offer in real time. 


RTB makes life easier for both publishers and advertisers. For publishers, using RTB helps to maximize ad revenue by making ad inventories available to a wide variety of buyers who are bidding for the ads at the same time. RTB makes the digital ads buying process more efficient, streamlined and automated for advertisers. It provides them with multiple tools for better audience targeting and ad inventory selection. 


RTB is good for the end users as well, as this technology helps show audiences more relevant ads. 


How does Real Time Bidding work? 



As an ad unit is loading in a user’s browser, the page and user viewing information it is sent to an ad exchange or a supply-side platform. Where this ad impression is auctioned to advertisers who are bidding on it in real time. The highest bid wins and the winning ad is shown to the user. The whole process is automated and takes just milliseconds to complete. 


Advertisers can apply multiple kinds of filters, focusing on those impressions that are most relevant to their goals. Another big advantage for advertisers is that this technology allows them to better manage their ad campaign budget and adjust their bids. This helps to achieve better performance and greater ROI.  


Advertisers often use DSPs as a tool that helps them to set the RTB process and decide which ad impressions to bid on and how much. DSPs automate the process of bidding and purchasing impressions, as well as setting up relevant ad targeting. They allow advertisers to automate ad buying based on a number of available targeting attributes. Some of these attributes include user behavior, demographic, relevant search or geolocation. 


RTB vs. programmatic advertising 


Another thing that we should probably clarify is the difference between real-time bidding and programmatic advertising. They are not the same things, so these two terms can’t be used interchangeably. 


RTB is a part of programmatic advertising, which describes all forms of purchasing ads using technologies for automation and organization. Not all programmatic advertising platforms utilise RTB, however. Some platforms allow publishers to sell their inventories the ‘old-fashioned way’ — a specific period of time and a fixed price. RTB, on the other hand helps to automate and streamline the whole process of buying and selling ads. 



Real Time Bidding (RTB)

Even though real-time bidding is a powerful technique designed to make the life of both publishers and advertisers easier, in order to utilise all its advantages and gain the maximum benefit out of selling your ad inventory on real-time auctions you would still need to invest some considerable time and effort into getting all the components of RTB process setup and running. 


Or you can just outsource it to experts in the field of programmatic advertising. pubGENIUS’ ad ops specialists are well-versed in the best practices and trends of the industry. We know how to utilize the RTB technology to achieve maximum ad revenues. Let’s make sure your websites are optimized, and your ad inventory is operating with maximum capacity at all times. 


Get in touch with pubGENIUS Team to get free consultation 🙂