Programmatic advertising is swiftly taking over the digital marketing space. According to data by Statista, the share of programmatic advertising in 2021 was $418 billion and is expected to reach $725 billion by 2026. To understand how it works, read our guide on programmatic advertising before proceeding with this article.
Real-time bidding (RTB definition) is one of the most popular advertising methods. The number of businesses going for it is increasing yearly with a CAGR of 32%. And if this is the first time you hear about it, we are ready to provide you with a detailed guide.
Here you will learn the answers to the following questions: “What is the RTB meaning?”, “What does RTB stand for?” and “How can I use it to maximize ROI?”
What is real-time bidding (RTB)?
So how does RTB work? Real-time bidding is a process for buying online advertising inventory. It allows media buyers to to programmatically bid for ad placements on publishers’ websites in real time, as opposed to buying them in bulk via traditional methods.
RTB is performed through an automated auction-based system, where buyers and sellers of ad space are connected in an open marketplace. The winner of the auction gets the ad space. The process occurs almost instantaneously in real time and is fully automated.
Adsterra partners with reliable SSP and DSP providers, serving premium, non-remnant traffic and thoroughly selected ads
Programmatic advertising vs. real-time bidding
Knowing what RTB is about includes understanding how it is different from programmatic advertising. Programmatic uses both auction-based and non-auction models while RTB is only about auctions.
RTB is designed for selling and buying top traffic and ad spaces. However, the algorithm is being criticized for operating poor-quality assets, as well. The use of this tool is under the responsibility of its providers.
Earlier, we shared guides to choosing the best DSP platform and selling premium traffic:
- Best DSP Platforms in 2023: Which One to Choose to Sell Your Traffic?
- Adsterra RTB: We’re Looking For Premium SSP Traffic Partners
What is real-time bidding in marketing?
RTB is the driving factor behind the majority of ad campaigns. Through it, advertisers can buy ad inventory, place their ads, and get results instantly.
RTB works on the basis of bidding per ad space. The entire process of auctioning occurs in milliseconds when the webpage is loading. The advertisers can set predefined conditions like target audience, demography, purchase intentions, etc. before the auction starts. Once the bidding is finished, the ads are displayed as soon as the webpage loads.
There are multiple stakeholders in the auctions each representing different sides which are connected programmatically.
Supply-side platform
RTB is a mean for publishers and advertisers to sell and buy ads facilitated by a supply-side platform. Such a platform connects publishers with multiple ad exchanges, demand-side platforms, and ad networks at the same time. It also lets publishers sell impressions to a broader audience of clients and make the bidding range usable for maximizing the suppliers’ revenue.
Demand side
A demand side platform (DSP) facilitates buying ad space. From the advertiser’s side, this is a typical platform for buying traffic. The advertiser uploads advertising materials (link to the landing page, creative) and sets the targeting (GEO, browsers, languages, devices, OS, etc.). Thus, a huge number of different advertising campaigns for different advertising formats and targets are consolidated within one system. Such a platform can also buy traffic directly from webmasters
To participate in the real-time bidding process, advertisers need to sign up with a demand-side platform and pay a small fee to fund their accounts. DSPs facilitate the bidding process for the advertisers by providing them with flexible pricing of advertising space and setting up RTB campaigns.
Ad Exchange
An Ad Exchange is a platform where publishers and advertisers buy and sell ad space respectively in real time. The majority of the ad slots sold here are in the form of display, video, or mobile ads.
SSPs put the ad slots from their publishers on Ad Exchanges. Hence, an Ad Exchange is the biggest pool of ad slots to choose from. An advertiser gets a specific ad slot taking into account individual factors like user behavior, location, time of day, etc.
How does real-time bidding work?
The RTB process involves publishers, advertisers, SSPs, and DSPs working simultaneously to complete the auction within milliseconds. To better understand what RTB is let us look at how it occurs:
- When any user clicks on a page in their browser, the ad slots on that page start loading. During this time, the publisher sends the available slots to the SSPs.
- The Information about the ad slot, the user, and what page they are on is sent to an exchange. The user’s previous behavior, time of day, type of device, etc., are the factors that decide the price of the slot being auctioned.
- The SSPs have a look at the data like demographic, location, etc., through website cookies and determine what ads might be relevant.
- DSPs help advertisers decide which ad slots to bid for, how much to bid, etc.
- SSPs have a look at the bids on the exchange and choose the winner based on their relevance with regards to the bid size, content, and the bid amount.
- The auction is completed, and the ad is displayed on the web page instantly.
- The entire process occurs while the webpage is loading.
How much does real-time bidding cost?
The cost of real-time bidding can vary greatly depending on the type of ad space you’re planning to buy. Generally, you can expect to pay anywhere from a few cents to several dollars per impression (CPM) or per click (CPC). The cost of RTB marketing can vary according to various factors, such as:
- Keywords in the ad,
- Target audience demographic,
- Location of the audience,
- Interests of the user,
- Scale of the ad,
- Websites the ad will be displayed on, etc.
Why is real-time bidding important
Real-time bidding is a practical thing for both advertisers and publishers.
Regarding advertisers, RTB helps show users more relevant ads and get more targeted and efficient buying. It also allows focus on the most pertinent inventory results and, as a sequence, gives higher ROI.
Talking about publishers, RTB here works best for increasing revenue and fill rates thanks to broadening the range of buyers in an auction. Also, knowing who’s buying what allows publishers to optimize campaigns and charge more for premium placements.
Benefits of real-time bidding for advertisers
The main benefit of RTB is the increased efficiency of the buying process. It gives more control and helps reduce irrelevant impressions thanks to better targeting. As a result, you get optimized expenses and spend less time but get multi-device compatibility with minimized fraud risks.
Benefits of real-time bidding for publishers
RTB is a way for publishers to find sources worth working with. It helps make choices based on latency, demand, ad space availability, and also bid rates. Due to it, the publisher may take complete control over the process and specify and match advertisers and their purchasing capacity.
Conclusion
The number of internet users is increasing, and the process of targeting their interests and data collection is becoming more streamlined. Against this backdrop, RTB advertising is going to gain more popularity as it is less time-consuming and more targeted in its ad placement than simply buying ad space.
Moreover, its affordable cost of entry and automation make it a very lucrative system for advertisers. With Adsterra, you can gain access to millions of high-quality and premium ad slots in just a few steps. Please fill in this questionnaire if you need to buy premium traffic, or this one if you want to sell traffic in large amounts. Or, use the buttons below to advertise and monetize non-programmatically.
