What is Real-Time Bidding (RTB)?
Real-Time bidding (or RTB) refers to the buying and selling of ad impressions in real-time through auction-style selling.
How Does Real-Time Bidding Work?
The process of real-time bidding can seem complicated, but it is automised and the whole process happens in just a few milliseconds as user enters a website. When a user enters a webpage, as it loads information about the webpage and the user, such as content and previous behaviour. This information is then sent to an advertising exchange which auctions the impressions off to advertisers who will bid for it based on how valuable the impression is to them (this is where the real-time bidding happens). The highest bidder wins the impression and their display advertising creative is more or less instantly uploaded onto that webpage to be viewed.
What are the Benefits of Using Real-Time Bidding?
One key benefit to using RTB is that it is much more efficient that buying ad inventory through direct sales. With real-time bidding there is no need to buy inventory from multiple different networks, as by using larger ad exchanges and DSPs advertisers have access to a big and varied pool of impressions.
Another benefit of RTB is that advertisers do not need to worry so much about wasting impressions, as real-time bidding allows them to only buy the impressions that they consider profitable and at the price that they are willing to pay. Therefore, it is reasonable to consider RTB is more cost efficient that direct sales for advertising inventory.