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 automated and the whole process happens in just a few milliseconds as the user enters a website. When a user enters a web page, it loads information about the web page and the user, such as content and previous behavior. This information is then sent to an advertising exchange which auctions off the impressions 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 web page to be viewed.
What are the Benefits of Using Real-Time Bidding?
One key benefit to using real-time bidding 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.