What is RTB (Real Time Bidding)?
I had explained in brief in one of my past posts about the RTB (Real Time Bidding). It is more of a protocol which is utilized by ad exchanges as well as the part of the complete system (DSP, SSP).
In very simple words Real time bidding is a technology where in all the ad networks or publishers are connected & you can buy ads on any of the ad networks or any website in real time basis [provided the website is connected with the RTB system, which is most likely the case]
Real-time bidding (RTB) is the advanced version of ad networks where in the advertising inventory of ads are purchased & sold in real time basis on per impression basis via programmatic auction or bidding system, similar to financial markets. With real-time bidding, advertisers or buyer place a bid on an impression and, if he wins the bid, the buyer’s ad is instantly displayed on the publisher’s website. This all happens in real time basis within a fraction of seconds which is why it is called Real-time bidding. With the use of RTBs advertisers can buy ads from multiple ad networks with various targeting options such as OS targeting, Mobile targeting, device targeting, Carrier targeting etc. & advertiser can optimize ads basis results from various ad networks/websites etc.
How Real Time Bidding (RTB) Works?
Real time bidding starts with as soon as the user is about to visit a website. This triggers a bid request from the publisher’s end that may include various other factors such as user’s demographics, browsing history, location, device, OS, browser etc. this happens while the page is still being loaded. This request from publisher is passed on to the ad exchange along with the accompanying data to various advertisers who are bidding automatically on real time basis to place ads. Advertiser bids on each impression as it is served and the advertiser with the highest bid gets the impression on publisher’s website. The bidding process may actually varies depending on the complexity of the user data however this is the standard process that takes place. It all happens within a fraction of seconds (1/10th of a second).
IS RTB SAME AS PROGRAMMATIC ADVERTISING?
I may or may not be true as RTB is for sure programmatic as everything done automatically however programmatic advertising does not necessarily use RTB which means some platforms work on fixed pricing which means real time bidding is missing in such case. This is referred to as programmatic direct or programmatic guaranteed.
Real time Bidding system consists of below several integral parts:
- Demand Side Platform (DSP)
- Supply Side Platform (SSP)
- Ad Exchanges
What is Demand Side Platform (DSP)?
As the name suggests demand side of the RTB is referred to as Demand Side Platform (DSP), which means advertisers use DSPs to place bids. DSPs are connected with ad exchanges wherein bidding process takes place. DSPs are used by agencies to automate the branding activity they can have in-house system in place as well. DSPs allow advertisers to buy impressions in real time on any of the publisher’s website using bidding system. So advertisers can buy from multiple sources of inventory.
The primary difference between an ad network and a DSP is that DSPs have the technology to determine the value of an individual impression in real time (less than 100 milliseconds) based on what is known about a user’s history. Some DSP companies are listed below:
Suggested Read – List of DSPs
- AdsWizz (AudioMatic)
- Adobe Media Optimizer (formerly Efficient Frontier)
- DoubleClick Bid Manager (DBM) (originally Invite Media Bid Manager)
What is Supply Side Platform (SSP)?
As the name suggests supply side of RTB is referred as Supply Side Platform or SSP. Using SSP publishers can manage their inventory well so instead of working with multiple inventory sources they have to work only with one partner and they can utilize or optimize their inventory well to sell it at higher pricing. SSPs are also connected with ad exchanges and the bid request is passed onto ad exchanges at the time of user visiting the website.
Supply-side platforms utilize data generated from impression-level bidding to help customize advertising campaigns. Platforms to manage ad operations are also often bundled into SSPs. SSP technology is adapted from ad exchange technology.Some of the Supply side platforms are:
Suggested Read –
List of Ad Exchanges or SSPs
Difference Between Ad Exchange & SSP
- DoubleClick for Publishers (DFP)
- Rubicon Project
- Tremor Video
- Index Exchange
What is an Ad Exchange?
An ad exchange is a technology platform or a piece of software that provides the functionality of buying and selling of ad inventory from multiple ad networks. Ad exchanges are connected with both DSPs as well as SSPs. So the bidding requests are passed onto & from ad exchanges. Prices for the inventory are determined through bidding. All the process is automated so there is nothing manual work involved here.
The major ad exchanges include:
- AOL’s Marketplace
- Microsoft Ad Exchange
- OpenX (company).
- Rubicon Project
- AdECN, which is owned and was purchased by Microsoft in August, 2007; Microsoft switched from AdECN to AppNexus three years later, retiring the AdECN platform.
- DoubleClick, was acquired by Google in 2008.