Real Time Bidding Explained

12 Jun 2017 | Articles

RTB has given new life to traditional display advertising. It uses many layers of data to target ads in real time with unprecedented accuracy. The platform processes hundreds of thousands of ad opportunities in milliseconds and decides which one is best for your audience and budget.

WHAT IS RTB?

Real time bidding (RTB) is a server-to-server buying process that allows inventory (ad space on websites) to be bought and sold on a per-impression basis. It happens instantaneous through an auction that determines who gets to buy a specific impression. It happens programmatically in the same way as financial markets do. If a bid is won, the advertisers ad is immediately shown on the bought publishers site.

REAL-TIME BIDDING IS NOT THE SAME AS PROGRAMMATIC

RTB is a decision process within programmatic however not all programmatic advertising uses RTB. For example, programmatic direct refers to an arrangement made directly between advertiser and publisher where inventory is agreed at a fixed price for a guaranteed number of impressions however the execution is carried out programmatically (in an automated way). Therefore, a real-time auction is not carried out.

HOW RTB TRANSFORMS CAMPAIGN PERFORMANCE

  • Improved ad performance
  • Reduced media wastage
  • Lowered cost per acquisition
  • Better targeting capabilities
  • Greater transparency
  • Less operational efficiencies
  • Increased margins
  • Accurate attribution

HOW DOES THE BIDDING PROCESS WORK?

As the name implies, RTB operates on an auction model. You set the max bid (CPM) that you will pay for a placement and win impressions at $0.01 above the next highest bidder. Here is an illustration:

Diagram of real-time bidding machine process

Get in touch with our sales team at [email protected] or call us on 020 3603 8610 to learn how programmatic can work for you.  

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Adela has worked in digital marketing across the retail, travel and B2B sectors. She lived in Spain for a year before trading in the mediterranean to work for a multi-website online retailer based in the UK which is where her marketing career began. Adela is the Marketing Manager at Admedo where she manages all elements of marketing strategy from branding, aquisition, content, PR and events.

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