Real-time bidding is the act of buying digital inventory from multiple publishers on an impression by impression basis, typically involving an auction pricing. It enables digital marketing and advertisers to bid in real-time on available ad inventory, maximize results within shorter timelines, and improve budget flexibility.
Display advertising traditionally required advertisers to pay a fixed rate for a certain number of impressions, even though some of those impressions might be less effective at certain times of the day. RTB allows larger advertisers to set their price based on a publisher’s relevance to their campaign and smaller advertisers to advertise whenever the current bid meets their budget.
But how does it work? RTB/Real-time bidding 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.