Real Time Bidding

SSP. DSP. PMP. Programmatic advertising has both revolutionized how ads are bought and sold, and added a whole new host of acronyms that can make talking about it sound like you’re reading a bowl of alphabet soup. Alas, we have to add yet another one to your abbreviation vocabulary: RTB. Those of you who’ve been on the creative side of advertising and marketing might know it as Reason To Believe. But on the sales side of the business, RTB stands for Real-Time Bidding.

What RTB is:

Real-time bidding is a type of programmatic selling and buying. The once days-long transactional process of bidding on advertising inventory is compressed into the span of 100 milliseconds (about 200 milliseconds faster than the blink of an eye) through RTB. Auctions that involve RTB are facilitated by ad exchanges or supply-side platforms.

What RTB isn’t:

Real-time bidding is not programmatic advertising. It’s just one way to buy and sell programmatically. That may seem simple, but you’ll find many who conflate the two. Programmatic also supports non-auction based models, AKA programmatic guaranteed or programmatic direct.

How RTB works:

A user scrolls through a webpage. As they scroll through content, ad impressions load, delivering details about the page and the user to an ad exchange or SSP.
The impressions are auctioned off to the highest bidder—an advertiser generally working with a Demand Side Platform to help guide their bid.
The winner’s ad opens with the page.

As mentioned above, advertisers often rely on Demand Side Platforms (DSPs) to guide their bids. Among the advantages of using DSPs is having more information at hand while bidding. For instance, Brand X’s DSP may recognize that the user has been on Brand X’s site recently, checking out a specific product. This may prompt Brand X to bid higher for this impression than another advertiser.

Why would advertisers consider RTB if they’re already purchasing directly and/or programmatically?

In a word: Efficiency. RTB is fueled by algorithms and machine learning that can assess millions of impressions and expansive inventory options almost instantly. It simply knows more, faster, than an entire team of humans can ever bring to the bargaining table. And it does it all without human error.

Six Degrees of RTB

Here are the top reasons RTB is a key ad buying tool:

Any size, any budget
- RTB is open to any advertiser from the small business with $100 to spend to the mega-corps with multimillion dollar coffers.
Massive inventory
- Ad exchanges connect advertisers with the widest possible range of digital publishers and sites, providing more opportunities for reaching key audiences.
Budget control
- Advertisers can set spend limits and price ceilings for a campaign to assure they stay on budget. RTB also minimizes expenditures as it automatically adjusts bids to auction conditions in real-time.
Precision targeting
- RTB auctions enable advertisers to target and serve users based on age, gender, marital status, behaviors and interests, location, device. This assures advertisers are reaching —and paying for— only the most relevant audiences.
Impression-by-impression
- Rather than buying a large number of impressions at a set price, advertisers can bid on one impression at a time, getting the lowest possible winning bid each time.
Real-time optimization
- RTB campaigns provide advertisers with real-time performance data, making it easy to assess which creative is working and where it’s working best for optimizing on the spot.

RTB is here to stay

With its mountains of data, incredible processing speed and ability to set precise targeting, pricing and budget parameters, RTB is a must-have solution in your portfolio of buying strategies. It makes that old “reach the right audience at the right time in the right place at the right price” promise you’ve heard about for years an actually true statement.