What is Real-Time Bidding?
February 12, 2018
Real-time bidding (RTB) is what its name suggests: advertisers bid in real-time on ads to be placed and distributed in a publication, app, feed, network or other media of your choosing. The practice has completely changed the digital advertising industry, but some advertisers may still be confused as to what it actually is.
Real-time bidding is the buying and selling of digital ad impressions via real-time auctions that happen in the milliseconds it takes for a web page to load. Auctions are facilitated by ad exchanges or supply side platforms (SSP).
The advantage RTB provides to advertisers is the ability to set target audience parameters and filters so they pay only for valuable impressions.
So How Does it Work?
As an ad impression loads in a web browser, information about that webpage and the user viewing it are passed to an ad exchange, which auctions the impression to an advertiser willing to pay the highest price for it. Almost instantly, the winning bidder’s ad is loaded into a web page; the process takes milliseconds.
In many cases, advertisers use a demand side platform (DSP) to decide which impressions are most valuable to them and decide how much to bid on those impressions based on quality of the placement, such as the website the ad appears on and the behaviours of the webpage’s users. Impression prices are determined in real-time by determining how much buyers are willing to pay.
Think of it Like a Stock Exchange
Like a stock exchange, ad networks create an environment where media buyers are like investors seeking the most profitable stock at the best possible prices to get the best possible return for their investment. Publishers receive a commission or payment for the placements they offer and advertisers can bid on the most effective, prominent or attractive ad placements.
Why Should Advertisers Care About RTB?
One word: efficiency.
No longer do ad buyers need to work directly with publishers or ad networks to negotiate ad prices. RTB helps advertisers access a vast ad inventory across a range of websites, allowing them to cherry-pick only impressions deemed most valuable based on the audience parameters they’ve set for a specific campaign. Doing so eliminates impressions wasted on users that don’t fit the specified target.
Consider this: an RTB ad impression takes under 200 milliseconds, from when a bid request is placed to when the ad is served.
The human eye takes 300 milliseconds to blink.
RTB impressions occur, literally, faster than the blink of a human eye!
Real-time bidding and ROI
RTB can increase the productivity of the ad buying process by improving an advertiser’s responsiveness to DSP platforms by making real-time media buying or ad buying decisions based on intelligence that’s highly targeted to deliver maximum ROI.
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