Real-Time Bidding, otherwise known as “RTB”, is an online marketing strategy and tactic that can be confusing for those that might not have the advertising basics, and even complicated for those that have ad tech grounding. That’s because RTB has many parts that you also have to grasp.
These other components include ad exchanges and the ad network itself. This also requires the understanding of two platforms: the supply-side (SSP) and the demand-side (DSP). Altogether this allows those using that specific RTB to take part in an auction that allows them to bid, buy and even sell ad inventory.
Confused yet? We feel you. And this is all before the process even begins. Don’t worry we’ve explained the process the best we could so you can understand what’s happening behind the scenes.
The Real Time Bidding Process in Layman’s Terms
The process itself begins when a user visits and accesses a website using an RTB platform. From that user interaction, the publisher’s website sends an immediate communication to the supply-side platform letting the SSP that there is an impression available to be bid on.
The SSP (learn more by reading this IAB one sheet) then looks at and analyzes that user impression which includes the user’s web history, the user’s location, and any other available personal information that the impression may carry such as the gender, the age, age group, the gender, income level, etc. then passes along this data to the ad exchange. Phew!
And it ain’t over yet! So once the ad exchange receives this data, it handshakes with the DSP (demand-side platform) and passes that user information over. From here is when the fun begins — meaning now that all the information has moved through all the platforms, the ad exchange begins the bidding process. The demand-side is then able to join that auction and place their bid on that impression depending on what they think the value of that particular impression is worth. For example, if the user data tells the bidder that the is a female between 16-24 and that’s the demographic that the DSP wants to target — they may bid more considering those target attributes.
Like any auction – from online ones at eBay to traditionally offline like Sotheby’s — the advertiser in this RTB process who puts in the highest bids wins and that number is sent back to the publisher and shown to the user. This entire chain of events is repeated for every single impression that is placed up for auction for every single user that visits that particular website, accesses a new landing page, or even when they refresh a page.
You know the crazy thing? Everything you just read about the process happens in under 100 milliseconds – which is a third of the time it takes us to blink (300 milliseconds). Remember when internet marketing was reading on an ad and clicking on it? The importance of personal data and targeting has certainly evolved the digital marketing industry. And RTB will continue changing the advertising technology landscape.