What is it?
Real-time bidding, also known as RTB, refers to the buying and selling of online ad impressions through real-time auctions that occur in the time it takes a webpage to load. Those auctions are often facilitated by ad exchanges or supply-side platforms. It enables digital marketing and advertisers to bid in real-time on available ad inventory, maximize results within shorter timelines, and improve budget flexibility.
How does it work?
Real-time bidding (RTB) involves three players: an advertiser (or media buyer), a publisher, and an ad exchange. Online publishers auction off their available ad inventory as an individual impression in real time via the ad exchange. Advertisers or media buyers use the ad exchange to bid in real-time per impression. Real-time bidding (RTB) allows advertisers to decide in real-time the value of an ad impression and decide whether or not to bid for that impression based on its value to their campaign.
Why does it matter?
Historically, advertisers would have to broker deal with websites directly. If they wanted to reach sports fans, they would buy ads on a sports-related site, for example. This purchasing model is inefficient and ineffective. With the use of real-time bidding (RTB), advertisers can decide in real-time the value of an ad impression and decide whether or not to bid for that impression based on its value to their campaign. They can use data to target sports fans on any website that they are visiting.