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Glossary – RTB (real-time bidding)

RTB (real-time bidding)

Nikiforov Alexander
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What is RTB?

RTB (Real-Time Bidding) is an innovative technology that allows advertisers and websites to participate in online advertising auctions in real-time. The auction process occurs instantaneously, and the winner gets the opportunity to show their ad to a specific user. This ensures more precise targeting and effective use of advertising budgets.

RTB vs Traditional Advertising

One of the main differences between RTB and traditional online advertising methods is that here, not just an advertising space is put up for auction, but the opportunity to display an ad to a user with specific interests who is currently seeking information on the site. This allows advertisers to more effectively reach their target audience.

Unlike fixed prices for impressions in traditional advertising, in the RTB model, bids are set by the advertisers themselves. The highest bid wins. This creates a dynamic environment for trading ad impressions, where each participant can propose their price to attract users' attention.

How RTB Works

The RTB process involves three key participants:

  • RTB System: a platform that organizes auctions.
  • Seller Websites: platforms that put advertising spaces up for sale. They connect to the SSP (Sell-Side Platform).
  • DSP Systems: platforms that buy impressions for their advertisers and collect bids and creatives.

The algorithm of RTB can be described in the following steps:

  1. A visitor enters a site connected to the SSP.
  2. The site sends a request to display an ad, passing information about the page and anonymous user data.
  3. The SSP forms a lot for sale at auction and sends it to the DSP.
  4. Advertisers place bids on the lot through the DSP.
  5. The SSP selects the highest bid and displays the winner's ad.

It's important to note that RTB uses a "second price auction" algorithm, meaning that the ad is displayed at a bid lower than the maximum bid of the winner.

RTB Rules

To successfully launch RTB advertising, it is necessary to consider the following rules:

  • Advertisers must clearly define their target audience and set targeting.
  • The infrastructure of suppliers must ensure rapid response to requests.
  • Advertising networks must instantly provide codes for obtaining data and banner requests.
  • Systems must collect and analyze user behavior data to improve advertising effectiveness.
  • Advertisers must place bids on impressions quickly.

RTB Ad Formats

There are many ad formats available for RTB auctions in the online advertising market. Popular formats include:

  • Display Ads: graphic ads and interactive smart banners.
  • Standard Design: text and graphic ads that automatically adapt to the size of the advertising space.
  • Native Design: ads that look like a part of the site's content.
  • Video Ads: short video clips that adapt to the size of the ad block.

Advantages of RTB Advertising

RTB advertising offers many advantages for all participants in the process:

  • Precise targeting of the target audience.
  • Reduction of ineffective impressions.
  • Increase in conversions at acceptable prices.
  • Ability to track bids and optimize advertising budgets.

Additionally, RTB marketing has a low entry threshold, allowing advertisers to launch campaigns even with minimal budgets starting from 1000 rubles.