Beginners those who are new to the programmatic advertising really wanted to know the workflow of Real Time Bidding Concept [RTB]. In most sites, real time bidding concept is explained in theoretical way. So, new beginners struggle to understand about RTB. I was also experienced same problem when i started to learn programmatic advertising concepts. To help the beginners to understand about RTB, How Does RTB really work, RTB workflow, I wrote this article to explain Real Time Bidding concept in more practical way.
Programmatic Advertising is software that is used to buy and sell ad space in an automated way. Also, it provides targeting, optimizing, and reporting capabilities to advertisers. Many of them are confused with programmatic advertising and real time bidding. Real Time Bidding is one part of programmatic advertising. But note that, all programmatic advertising is not done through Real Time Bidding.
Real Time Bidding is an instant auction for buying and selling ad inventories in real time. Real Time Bidding is facilitated by Ad Exchanges or Supply Side Plarform.
– SRidaran baskran
What is Real Time Bidding? How Does Real Time Bidding work?
Before dive into the process of Real-Time Bidding you must be aware of a few terms mentioned below,
Advertisers: Who wants to buy an ad inventory space [ad slot] to show their ad? If you see Boost Advertisement when you visit a web page, here boost is the Advertiser.
Publisher: Publisher means Website/Application, where the inventory space [ad slot] is available. One publisher can hold one or more sites/apps.
DSP: DSP is a Software that can support real time bidding, targeting and reporting, etc. [What is Demand Side Platform? How Does It Work?]
SSP: SSP is software, publishers use this software to manage & sell their ad inventory in an automatic way. By using SSP, publisher can serve display, video, and native ads on their websites and apps [What is Supply Side Platform (SSP)? How Does It Work?]
Ad Exchange: Technology that allows advertisers to buy and publishers to sell advertising in real-time. [
Bid Request : Bid Request is a code or call request. Information about the user, cookies, user id, browser information, ad layout and so information available in this request.
Read More Here : 20+ Digital Advertising Terms & Definitions You Should Know
Advertisements are not showing on every website. If the website owner is interested in showing the advertisement on his website/application to make some money then the site owner should do some work to display advertisements. That work is called “Monetization”. For example, if I am interested in showing an advertisement on this website: https://srimarketingstrategy.com/ to make some money I have to register in ad exchanges like Google Adsense and paste their code into my website. So when the user opens my website, the browser loads the contents along with the ad code.
Website contents retrieved from my hosting server and loaded ad code send an alert about the ad space available to the ad exchange. Ad Exchange will send the ad request to all the connected demand-side platforms. Once all bid responses are received from the demand-side platform, real-time bidding (real time auction) occurs at the ad exchange. Who bids more will win the auction and the ad exchange will send the winning bid notification to the corresponding demand side platform. Then demand site platform sends the ad code to the browser. The browser fetches the ad banner and displays the ad to the user.
Real Time Bidding Step-by-Step Process
0 Seconds : User opens or refreshes webpage and browser loading for retrieving web contents.
0.04 Seconds : Ad Code also loading and bid request is sent to SSP to get an ad. SSP asks its server whether we have any advertisements to respond. If there is no ad then SSP forward this bid request to Ad Exchange.
0.08 Seconds : Ad Exchange now forwarded that bid request to Multiple DSP’s
0.10 Seconds : Ad Exchange sends the user’s profile, cookies information, website category, blocked category, layout, etc to multiple DSPs
0.12 Seconds : Every DSP matches the received information to their advertisers’ targeting [Already Advertisers created campaigns in DSP with multiple targeting]
0.125 Seconds : If targeting matched then DSP generates optimal bid for winning the auction
0.13 Seconds : All DSP’s sends their bid amount to the Ad Exchange
0.14 Seconds : Now Ad Exchange compares all the bid responses and selects the winning bid
0.18 Seconds : Ad Exchange sends the selected bid price and ad tag to the publisher’s ad server
0.19 Seconds : Publisher Ad Server tells the browser which ad to display
0.23 Seconds : Browser loads that ad tag and requests sent to the Advertiser’s Ad server. Advertiser Ad Server sends Ad to browser
0.31 Seconds : Browser displays Ad and sends information to the corresponding DSP
0.36 Seconds : The entire process gets completed.
Advantages of Real Time Bidding
- Advertisers can buy the impression when a user is matched with their targeting. So Advertiser’s costs saved.
- By using cookies it is very easy to identify the users. So advertisers can apply frequency caps and limit the number of views for an ad.
- Instead of buying bulk impressions advertisers can purchase what they want in real time bidding
- All ad slots are filled with Advertisements. So loss is minimized by real time bidding for the publishers.
- Instead of selling entire ad slots for a low cost, premium sites can earn more revenue in real time bidding
- Before winning the auction, advertisers can know about the website so they can ignore bad quality websites.
I hope, now you understand the programmatic advertising concept of “Real Time Bidding”. I have created a programmatic advertising course here and you can learn more about programmatic advertising concepts free of cost. If you have any questions feel free to comment here.
Frequently Asked Questions :
Q : Is real-time bidding a form of programmatic buying True or false?
A : Yes, real time bidding is a part of programmatic buying. But, all the programmatic buying is not real time bidding.
Q : What is the difference between Real Time Bidding vs Direct Buying?
A : RTB uses real time auction model whereas direct buying uses non – auction model.
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