Real-Time Bidding (RTB)
What is Real-Time Bidding?
Real-Time Bidding, or RTB, is a programmatic ad buying process where Demand-Side Platforms (DSPs) on the advertiser side, and Supply-Side Platforms (SSPs) on the publisher side, buy and sell ad inventory.
In an RTB auction, DSPs bid in real-time on ad inventory supplied by SSPs. The entire process happens in only a fraction of a second.
How does real-time bidding work?
In an RTB auction, SSPs go through an ad exchange to make ad space available on publishers’ apps. DSPs see these available impressions and bid on them based on the targeting criteria laid out by the advertisers. The impression goes to the advertiser with the highest bid, and their ad is served in the app.
In RTB, all advertisers interested in an impression opportunity bid on it simultaneously, and the highest bid wins the impression. Because real-time bidding is a programmatic technique, the time between a user landing on a space where an ad can be served and the ad appearing spans just milliseconds.
What does real-time bidding mean for app developers and advertisers?
For developers, RTB simplifies and streamlines the buying process; they don’t need to manually prioritize ad networks in the waterfall in order to optimize their revenue. The ability to set price floors also allows developers to expand their buyer audience without compromising advertiser quality or sacrificing revenue.
Compared to a traditional ad network, RTB allows advertisers more control over the buying process. Because they can bid per impression, there is more transparency and precision in targeting. The ability to view campaigns in real-time also allows for easier and more responsive optimization.
What is the future of the programmatic waterfall?
The waterfall has worked well for years, but the mobile industry is quickly moving to in-app bidding, which is the mobile app-specific version of RTB (the desktop equivalent is called “header bidding”).
- Increases revenue for publishers.
- Allows advertisers a fair chance to bid on ad inventory.
- Allows consumers to see more relevant ads.
Learn more about Real-Time Bidding in our Ad Tech Deconstructed series.
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