Understanding Real Time Bidding: A Guide for Advertisers


Published: 13 May , 2024

In the ever-evolving landscape of digital advertising, staying ahead of the curve is paramount for advertisers looking to maximize their campaign effectiveness. One of the most powerful tools advertiser's arsenal is Real-Time Bidding (RTB). But what exactly is RTB, and how can advertisers harness its potential to drive results?

In this comprehensive guide, we'll delve into the intricacies of RTB, exploring its mechanics, and benefits. Join us as we demystify RTB and unlock its potential for advertisers everywhere.

What is real-time bidding (RTB)?

Real-time bidding (RTB) is the method of buying and selling online ad impressions in real-time auctions conducted through online media marketplaces. It involves three key players: advertisers, publishers, and users. Advertisers determine the value they're willing to pay to display ads to specific users, while publishers auction ad space on their websites in real time. 
In RTB auctions, advertisers submit bids based on various targeting criteria, such as demographics, interests, and browsing behavior. These bids compete with each other, and the highest bidder wins the right to display their ad to the user visiting the publisher's website. This entire process occurs in milliseconds, seamlessly integrating ad serving with website content delivery.

RTB or Programmatic

Are programmatic advertising and real-time bidding (RTB) the same thing? It's time to clear up any misunderstandings since the answer is no.
One component of programmatic advertising is RTB, which is defined by quick auctions powered by audience data. RTB is essentially a technique that falls within the larger category of programmatic ad buying. Real-time bidding (RTB) allows advertisers to make decisions about impression placement in real-time as web pages load by utilizing audience data that is made available to them during the ad call or bid request.
However, it's important to remember that the vast programmatic market, where online advertising can acquire media, encompasses more than just RTB. The word "programmatic" refers to both automated processes and other media-buying strategies.
 Using advanced software and algorithms, programmatic media buying completely transforms the way we purchase digital ad space, automating the entire process. This approach uses AdTech platforms to streamline online media buying and selling with efficiency and precision. There are various ways to buy online media programmatically:

Programmatic Direct:

This approach uses software to help accomplish a one-to-one operation that is similar to traditional ad purchases. 
Publishers and advertisers use AdTech platforms to set campaign parameters and automate campaign delivery and reporting.

Real-Time Bidding (RTB):

RTB allows marketers to purchase ad space through open market auctions at the impression-by-impression level. 
In order to enable dynamic and competitive transactions, any advertiser can place a bid and secure ad space on a publisher's website.

Private Marketplace (PMP):

PMP operates in a similar manner to RTB, but it is limited to a select group of advertisers rather than being available to everyone on the open market. 
High-end websites and respected brands commonly use this cautious strategy, guaranteeing customized and focused ad placements.

RTB players

Advertiser: As an advertiser, you're the driving force on the "buy side" of programmatic advertising, aiming to showcase your product or service to the right audience.

Demand-Side Platform (DSP): A DSP serves as your technology ally, empowering you to automatically bid for available ad space across various digital platforms. By interfacing with the supply side, DSPs gather crucial information about available inventory and pricing. They leverage advanced algorithms to analyze user data and other key factors, helping you identify the most valuable impressions to bid on.

Publisher: On the "sell side," publishers are the gatekeepers of ad inventory, offering space on their websites and apps to advertisers. Their primary goal is to maximize revenue by selling each spot to the highest bidder.

Supply-Side Platform (SSP): SSPs play a pivotal role by providing publishers with the tools to auction their available ad space efficiently. These platforms enable publishers to organize bids based on factors such as advertiser, format, audience, and price, ensuring optimal matches for their inventory.

Ad Network: Acting as intermediaries between advertisers and publishers, ad networks facilitate the buying and selling of inventory. They aggregate inventory from various publishers and sell it to advertisers, often in bulk. Additionally, ad networks can assist advertisers in managing their campaigns effectively.

Ad Exchange: Picture an ad exchange as a bustling digital marketplace, where transactions occur in real time. Here, advertisers and publishers converge to strike deals swiftly, ensuring seamless transactions and optimal utilization of ad inventory.

How does RTB work?

The way that the real-time bidding (RTB) process works is so quick and intricate that it almost seems magical. Many complex steps take place in a short amount of time, and we hope this explanation clarifies how RTB works.


All partners associated with the publisher immediately receive a request upon page loading. Therefore, the publisher promptly sends invitations to bid for advertising space to all supply-side platforms (SSPs), demand-side platforms (DSPs), and advertising networks. While the mechanism may seem complex, the entire process transpires in less than 500 milliseconds.
Let's explore RTB's operation using these eight straightforward steps:

  • The user accesses a website.

  • The website sends a request to display ads on SSPs, ad exchanges, or ad networks.

  • The SSP relays information about the request to the Ad exchange, where DSPs participate.

  • In their databases, DSP cross-references the received user-id information. (DSPs may also procure data from a data management platform (DMP)).

  • DSP places a bid (if the user meets the advertiser's criteria) based on data specified in the SSP lot, their own DSP data, and data from DMP.

  • SSP selects the highest bid from the available options. Subsequently, it either maintains the same bid (in the first-price model) or reduces it to the amount of the previous bid and adds $0.1 (in the second-price model).

  • The auction winner sends the advertisement to the website, which then displays it to the targeted user.

  • The user views the most relevant ads tailored to their interests.

Real-time bidding benefits

The advent of real-time bidding (RTB) has completely transformed the digital advertising industry, providing advertisers with unparalleled control, efficiency, and effectiveness in reaching their desired audience. Let's dive into the advantages of RTB for advertisers and how they can harness this powerful technology to create effective campaigns.
Improved Targeting: Real-time bidding empowers advertisers to precisely target their ads, ensuring they reach the most relevant audience. This is achieved by considering factors such as demographics, interests, and online behavior.
Enhanced Efficiency: By automating bidding and real-time optimization of ad placements, advertisers can improve the effectiveness of their campaigns, minimizing resource waste and increasing ROI.Cost-effectiveness: RTB allows advertisers to bid on ad impressions according to their perceived value, ensuring that they pay competitive prices for inventory that matches their campaign objectives.
Flexible Budget Allocation: Advertisers can easily adjust their budgets and bidding strategies to optimize spending based on performance metrics and campaign goals.
Access to Premium Inventory: RTB offers the opportunity to tap into a wide range of premium ad inventory available through different publishers and ad networks. This enables advertisers to effectively reach their desired audience on high-quality websites and apps.
Real-time Insights: Advertisers can access real-time insights into campaign performance and audience engagement, allowing them to make informed decisions and improve their targeting and messaging strategies while on the go.
Scalability: RTB provides the flexibility for advertisers to easily adjust the scale of their campaigns to meet evolving business demands and market dynamics.


RTB has become a cornerstone of modern digital advertising. By allowing advertisers to bid on ad inventory in real-time based on audience data, RTB offers unparalleled flexibility, targeting precision, and efficiency. Advertisers can maximize their ROI by reaching the right audience with the right message at the right time, while publishers can maximize their revenue by selling their inventory to the highest bidder.
However, success with RTB requires a deep understanding of the technology, strategic planning, and ongoing optimization. By staying informed about the latest trends and best practices in RTB, advertisers can stay ahead of the curve and achieve their advertising goals in an increasingly competitive landscape.

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