As the name would suggest Real-Time Bidding (or RTB for short) is the process of buying and selling ads in real time – it is the process by which digital advertising inventory is bought and sold. In practice, this means that publishers are able to serve a customer with a targeted and timely advert in a fraction of a second. It also means that advertisers are able to target customers with precision and on a per-impression basis making the return on investment cheaper and more efficient.
Real-time bidding works so quickly that often a person loading a web page wouldn’t even know that the process was going on. When they click on a web page and it loads all of the different elements, the ad space is blank. As the page loads real-time bidding means that lots of different advertisers are competing to be able to show their advert to this end user. Known demographic details about the end user are factored into the decision and will alter the price that the advert is sold for.
Real-time bidding, a form of programmatic advertising, factors in all known customer data to determine bid prices for targeted ads, exemplified by ad exchanges that serve programmatic ads, like those triggered by a user’s visit to a dog food site, with ad exchanges playing a crucial role in facilitating this process.
When an end-user needs an ad to be displayed on a web page, the request to find an appropriate ad is created by an SSP or a supply-side platform. This is then connected via an ad exchange, where the real-time bidding takes place. The adverts are put into a demand-side platform (DSP) by companies and advertisers. Depending on the price paid, a company may win the right to serve their advert. If they do then their advert appears on the end-user’s webpage. They wouldn’t even know about it as the whole process takes place so quickly.
Real-time bidding wouldn’t have been possible ten years ago, but now it’s relatively common. It means that advertisers get access to cheaper impressions and end-users are served adverts that are more likely to be relevant for their searching. Naturally, there will always be those who think that any form of advertising is a bad thing, however, as business models for publishers are squeezed by the lack of revenue from end-users, it only seems fair that some advertising routes get involved.
Real-time bidding and programmatic advertising benefit both advertisers and end-users by ensuring more relevant ads, leading to increased revenue for advertisers and a better user experience. Ad servers find an advantage in maintaining a balance between the two sides of the advertising equation. Additionally, real-time bidding empowers advertisers to take control of their ad buying, eliminating the need for intermediaries and enabling significant cost savings.
Reacheffect® is a world-leading web and mobile advertising platform, providing a distribution channel to advertisers and a monetization solution for publishers.
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