What is RTB/Real-Time Bidding?
Real-time bidding (also known as RTB) is a subcategory of programmatic buying. It refers to the practice of buying and selling ads in real time, on a per-impression basis, in an instant auction. This is usually facilitated by an SSP (supply-side platform) or an ad exchange.
How Does RTB Work?
At any given moment multiple advertisers can bid on a single impression of a publisher’s inventory, then the winning ad is shown to the user. Through RTB, advertisers can apply fine-tuned targeting and focus on the inventory most relevant to them, which in turn yields better ROI and higher eCPMs. RTB also allows advertisers to adjust their campaign budgets in real-time in order to optimize campaign performance.
RTB in Action
Take, for example, the moment in a mobile game where the player watches an ad between game levels. At that moment, the mobile SSP runs an auction for all of the advertisers interested in showing an ad to that player. The advertisers make their bid, in a split-second the highest bidder is chosen, and the ad gets served to the player. Both publishers and advertisers can set parameters for RTB, such as minimum prices and maximum bids, as well as prioritize specific deals and inventory.
Why is Real-Time Bidding Important?
RTB is effective for both advertisers and publishers. For advertisers, RTB means more streamlined, efficient, and targeted buying. The ability to fine-tune targeting and focus on the most relevant inventory results in higher ROI, while users see more relevant ads. For publishers, RTB increases revenue and fill rates by opening inventory to a wider variety of buyers in a competitive auction. Finally, publishers gain visibility of who is buying which inventory and can leverage this knowledge to charge more for their premium placements.
Reference: “Adjust,” Retrieved – 23 April 2018