Real-time bidding (RTB) is an online advertising concept that’s not easy to grasp for the programmatic advertising newbie because it might look like it comprises too many components: from supply-side platform (SSP) and demand-side platform (DSP) to ad exchange (read here what ad exchange is) and ad network, all participate in the auction, buying and selling ad inventory.
Over the past three decades, the sale share of the real-time bidding in advertising has tripled in the US, China, and the UK, according to Statista.com data. The research predicts RTB advertising to reach $29 billion spend by the end of 2025. So, now is just about the ideal time to provide an answer to’what does RTB means in advertising?’ question and discover out how media buyers and sellers benefit from it.
Compared to traditional media buying, where agencies and publishers to negotiate prices, programmatic technology is powered by machine-learning algorithms, cloud-software platforms which make the process of buying and selling as quickly as it’s efficient.
In the 21st century, media buying evolved into an automatic process called programmatic. Prior to this, advertisers had to negotiate with dozens of advertising systems about ad placement, the publishers had to look for advertisers to sell their inventory. In general, the advertiser had to take 42 steps prior to the ad impression was eventually served to the user.
Real-time bidding online ads boldly marched into ad tech to be able to eliminate human errors, facilitate buying media at a larger scale, reduce the paperwork and streamline processes.
RTB significance is distinct from programmatic concept. RTB merely represents one of the versions of programmatic advertising, among which there are also direct ones, as well as non-auction-based, where publishers contact advertisers directly (much more information concerning the programmatic ecosystem you may locate here).
Real-time bidding debut: unifying everyone
How could be real-life bidding definition wrapped up in simple words? In fact, this is a way of online ad purchasing that’s eased by real-time bidding auction. The mechanism supporting RTB auction is following: as a user opens the web browser and loads the target page he or she sees the ad banner – the product of this auction between advertisers wanting to serve an ad impression for this user, won by the person who was supplying highest bid request. The whole process is automatized and takes no more than 100 milliseconds to perform. Simple as that.
The whole real-time bidding model can be compared to a universal system that ties together advertisers, publishers, and data providers by usage of programmatic ecosystem elements like DSPs. Using DSP advertiser can buy ad inventory at lowest price and SSPs (much more information about what SSP is you can find here – Meet SSP: The Very Best Friend of a Digital Publisher) that represent publisher’s interests and help to sell their inventory at the highest price.
Real-time bidding guide for advertisers and marketers
To enter an RTB surroundings and start participating in lively auctions, advertisers should join a demand-side platform. DSP-systems simplify the process of ad inventory buying on a high number of advertising exchange platforms allowing the flexible price management for impressions and real-time bidding ad campaign setup. In order to begin using DSP, an advertiser or marketer should enroll at DSP, and then deposit a small fee to the personal account. Following this, campaign can be launched.
- Real-time bidding how it works for advertisers inside DSP:
- The demand-side platform allows to maximize ad campaigns;
- set a targeting profile and choose a budget framework;
- choose what sort of target audience has to be reached;
- pick what sort of publisher websites are prioritized;
- mark the ad inventory which should be blacklisted;
- control how much money is to be invested in a day, how many ad impressions should be served along with a number of other custom parameters.
Let us find out what’s an RTB network in deep.
So, on the opposite side of the programmatic reality, publishers use a software called a supply-side platform. It allows them to manage their electronic advertising inventory and join to demand partners through RTB.
Real-time bidding meaning is complex. Quite simply SSP packs the user data and sends a request to the ad exchange.
The publisher’s bid request is actually a code that contains information about the user. In the bid request, the publisher’s SSP specifies the minimum price that will be accepted for this ad impression and the currency in which the transaction will be accepted.
After the bid request lands in the ad exchange, multiple DSPs (considerably more information about what DSP is you can find here – What is DSP? ) begin to process it. If the ad impression is valuable and it matches the targeting options and budgeting settings of the advertiser, the DSP would bid on it by sending a bid response through the RTB protocol.
DSPs specifies the price that’s ready to be paid for the ad impression. The DSP also sends the link to the ad creative in the bid response and mentions its parameters. After the publisher’s SSP collects all of the bids responses, it analyzes them and chooses the highest. The following list represents what’s a real-time bidding platform in terms of marketing benefits.
Ad campaigns of any size and budget capabilities: Today RTB is utilized by various media buyers, from small, local business owners with $100 ad budgets to global, multimillion-dollar companies.
Exposure to a selection of publishers: Through the RTB ecosystem, media buyers connect with a profusion of digital publishers, app developers, blog and website owners — locally and worldwide. Accessing such a huge pool of supply-side platform partners allows choosing the best ad inventory and superior audiences.
Ad impressions at reasonable prices: Marketers optimize their advertising budget by setting price floors and daily or monthly spend limitations for a campaign. This way, marketers can always be certain they buy ad impressions that come along with their financial goals.
Audience buying: With RTB auctions, marketers actually buy the publisher’s niche audiences thanks to cookie matching. The system uses first- and third party data to analyze audience segments and build the profile of the target group.
Reaching the proper audiences at the ideal time and context: Through RTB bidding auctions, marketers deliver consistent messages to the appropriate public. It is possible to enhance consumer visiting, targeting according to their age, gender, social, and marital status, behaviour and interests, location, device, etc..
Eliminating wasted ad impressions: With exact RTB targeting, marketers have the ability to show ads to people who are interested in their product or service and most likely to perform the desired action (click, call, subscribe or buy).
Impression-by-impression purchasing: Rather than buying ad impressions in bulk and never knowing where they will appear and what will be the engagement rate, marketers bid on one impression at a time. DSP analyzes each impression by given parameters and provides a different price for it depending on its value.
Bid optimization algorithm. Real-time bidding helps to minimize expenditures because it adjusts the bid based on the auction conditions in real time. This helps to acquire a targeted impression.
Obtaining real-time actionable data: Over the course of the RTB campaign, marketers can assess which strategies work and which fail, understand which creative drives the maximum engagement and which websites are performing better, and receive granular reports and data. From these robust data, marketers draw insights into how their real-time bidding campaign plays, optimize their future campaigns for even greater revenues.
Running multiple real-time bidding campaigns: One DSP connects to the great number of supply partners: SSPs, ad networks, and ad exchanges. This way, advertiser can access a diversity of supply parties via one DSP interface running one, two, or more DSP ad campaigns at exactly the same time.
Real-time bidding: how to achieve your goals?
With opportunities presented by real time bidding, brands, media buyers and marketers can eventually display relevant messages to their target audiences. RTB has revolutionized online advertising, offering the option to purchase independently every ad impression rather than paying hundreds of dollars for a bunch of a thousand impressions that bring minimal or no real value.
The examples of real time bidding impeccable performance along with our deep experience in online advertising allow us to supply our clients with innovative programmatic advertising RTB products that established the highest effectiveness in ad tech. Our experienced professionals are eager to help and support you in every stage of growing your RTB marketing campaign, from opening your personal account to tuning and optimizing your current ad strategy in our system.