Consider a scenario in which a person loads a web page, and boom – an ad appears within moments. That whole scenario and process that occurs in the background in a few milliseconds is what we call Real-Time Bidding, or, in short, RTB. But what is this, how does it work in the backend, and why is it important in recent times for digital advertisements?
What Is Real-Time Bidding in Advertising?
Real-Time Bidding is an automated process where advertisers compete to display their ads to a specific user at a particular moment. It is a type of Programmatic advertising.
Think of this conceptually in terms of some form of digital auction, where once a slot appears on an app or website, advertisers may choose to bid on that piece of advertising or not.
Their systems assess the available information and submit bids automatically.
The advertiser that places the highest bid then has the ability to run their ad. The whole process happens within milliseconds, and that’s the reason you only notice the finished product of that entire process.
This is unlike Meta Ads, where the brand might pay to have their ad in a specific position ahead of time; an RTB system lets the advertisers decide in real-time when to run the ad impression.
Why Do Advertisers Use RTB?
Apart from normal paid ads, advertisers use RTB to make faster and more targeted ad-buying decisions. Each user, webpage view, or ad impression holds a different value to the advertiser. For instance, an advertiser might be seeking users fitting a specific audience profile. An impression that fits its campaign requirements.
RTB enables advertisers to get and evaluate those opportunities programmatically. Based on campaign and allowed targeting signals, the following criteria can lead to a system making or not making a bid automatically: geography, device, the users who are seeing the ads, web or app, campaign goals.
This enables greater selectivity in the realm of digital advertising. Instead of simply showing up everywhere for all opportunities, advertisers only pay for the right impression to show up and choose a bid that works for their needs.
Benefits of Real-Time Bidding
| Benefit | What it means |
| Better targeting | Reach people who fit your audience. |
| Smarter spending | Faster buying |
| Wider reach | Access ads across many websites and apps. |
| More control | Adjust bids, budgets, and targeting. |
| Faster buying | Automate ad buying in milliseconds. |
However, “It doesn’t instantly solve everything; if your targeting is bad or your creative doesn’t resonate, you can still throw money away and still waste a campaign budget.
Platforms Involved in Real-Time Bidding
RTB platforms help advertisers buy digital ad space through automated auctions. The main platforms involved are:
- Demand Side Platform (DSP): For advertisers to evaluate the bid.
- Supply-Side Platform (SSP): Assists publishers in selling their available ad space.
- Ad exchanges: A common connecting point for buyers and sellers for the auction.
The exchange is the marketplace where this auction takes place, and the DSPs and SSPs are the platforms that agencies/advertisers or publishers use to analyze/bid on the availability.
Google Display & Video 360, The Trade Desk, and Amazon DSP are some of the more commonly heard of platforms.
How Does Real-Time Bidding Work?
So, how does real-time bidding work? For that, we have to break down the whole real-time bidding process into a few simple steps.
1. A User Opens a Website or App
A person visits a website or opens an app. If the page contains an available advertising space, an opportunity is created to display an ad.
2. An Ad Request Is Sent
The publisher’s advertising system sends information about the available ad space. This information helps potential buyers determine whether the impression matches their campaign requirements.
3. Advertisers Evaluate the Impression
Advertisers use a demand-side platform (DSP) to assess the opportunity. A DSP is a technology platform that helps advertisers buy digital ad inventory automatically. If the impression matches a campaign’s targeting criteria, the advertiser decides to participate in the auction.
4. Advertisers Submit Their Bids
Interested advertisers submit bids automatically. One advertiser may consider a specific audience highly relevant, while another may not want to compete for it at all.
5. The Auction Selects a Winner
The available bids are evaluated according to the auction’s rules. The winning eligible advertiser gets the opportunity to serve its advertisement.
It is important not to think of this as simply “the highest bidder always wins.” Auction rules, eligibility requirements, and the publisher’s setup can also affect the outcome.
6. The Winning Ad Is Displayed
The winning creative is returned to the website or app and shown to the user. The complete real-time bidding process, from the ad opportunity becoming available to the advertisement appearing, takes place extremely quickly, usually within milliseconds.
Programmatic Advertising vs RTB: What Is the Difference?
Programmatic advertising refers to the broader use of technology to automate the buying and selling of digital advertising. And RTB is just one method within that broader programmatic ecosystem. The terms are often used interchangeably, but programmatic advertising vs RTB is not really an either-or comparison.
| Programmatic advertising = the broader automated buying system |
| RTB = an auction-based method used within that system |
If you are a business in the MENA region (Middle East and North Africa) and confused about whether programmatic advertising is for you or not. Read: Programmatic Advertising in MENA.
Real-Time Bidding Example: A UAE Customer Browsing Online
Consider a person in Dubai browsing for shoes online. And then, after a few minutes, he closes and opens another website or app.
And the website or that app has an available ad slot. When the person opens the page, that opportunity is offered to advertisers. Several brands targeting relevant UAE audiences assess the impression through their advertising platforms.
One advertiser decides that the impression fits its campaign and submits a bid. Another may decide that the user or placement is not relevant and choose not to bid.
The auction then determines which eligible advertiser wins based on the publisher’s requirements. Its ad is served in the available space, and the user sees it on the page.
Note: The important point is that the advertiser is not necessarily buying the entire website placement. It is making a decision about that particular advertising opportunity. If the user scrolls, clicks another page, or refreshes, a new RTB auction happens for the next view.
Getting your ad in front of people is only half the job. You also need the right audience, placement, and bidding strategy. GenX Media specialises in helping brands reach relevant audiences through data-driven digital campaigns. If you are looking to make your advertising more targeted and efficient, speak to the GenX Media team about your campaign.
Frequently Asked Questions
Is RTB the same as programmatic advertising?
No. RTB is one method of buying ad inventory within the broader programmatic advertising ecosystem. Programmatic advertising covers several automated ways of buying and selling digital ads, while RTB specifically involves real-time auctions.
How fast does an RTB auction happen?
An RTB auction usually happens within milliseconds. The bidding, auction, and ad delivery must happen quickly enough for the winning ad to appear while the webpage or app is loading.
Who participates in an RTB auction?
The main participants include advertisers, DSPs, SSPs, ad exchanges, and publishers. The DSP helps advertisers bid, while the SSP helps publishers offer their ad space. The ad exchange can facilitate the transaction between buyers and sellers.
How do advertisers decide how much to bid in RTB?
Advertisers can use factors such as their campaign budget, target audience, expected value of the impression, and campaign goals to determine their bids. Their DSP handles these decisions automatically based on the campaign settings. Apart from that, a publisher can set a minimum price for an ad impression. This is commonly called a floor price or price floor.
