What Is RTB? Your Complete Guide To Real-Time Bidding

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The Digital Age continues to pack plenty of punches when it comes to marketing innovations and advancement. Of course, for every handy new tool out there, there’s also a significant learning curve.

As a result, the ever-changing landscape of digital marketing can feel daunting to navigate, even for the most experienced marketers.

From “Big Data” to programmatic marketing and behavioral targeting, there are many new concepts to learn and apply. You may also have questions like, “What is RTB?” and “How does RTB relate to programmatic advertising?”

Instead of letting these concepts overwhelm you, it’s time to drill deep so that you gain a better sense of what RTB is and how it can help your company ramp up sales.

Of all the concepts you need to better understanding, real-time bidding (RTB) should rank near the top. With that in mind, keep reading to find out why.

What Is RTB?

What is RTB in marketing?

Real-time bidding (RTB) is a digital advertising concept related to programmatic advertising. It involves a variety of moving parts, including:

• A supply-side platform (SSP)
• A demand-side platform (DSP)
• An ad exchange
• An as inventory

In other words, defining these terms can get tricky. At its heart, though, think of real-time bidding like an electronic auction. This auction allows for the purchase of individual ad impressions on websites and other pages such as games and apps.

An integral component of programmatic advertising, RTB automates the processes and transactions. These processes and transactions include purchasing and placing ads in real-time.

How does RTB do this? By utilizing algorithms that optimize transactions, allowing publishers to lock in the best price per impression. Conversely, advertisers get the placements they most desire.

How are bids for ad impressions established? Through criteria such as ad placement and ad size as well as filters based on the advertiser’s ideal audience and the available ad inventory.

The Future of Digital Marketing

Is RTB really reshaping the future of marketing, though? Consider this. Over the past three years, shares of RTB in advertising have skyrocketed threefold in the UK, China, and the US.

By 2021, the US will spend more than $81 billion on RTB alone. That’s 88 percent of future digital display ad budgets!

In other words, you can’t sit in the bleachers and allow the RTB revolution to leave your company in the dust.

In the 21st century, media buying has evolved into an automated process, which we call programmatic advertising, and there’s no turning back. After you learn more about RTB, though, I’d wager you won’t want to.

What’s more, once you know the ropes, you’ll quickly come to appreciate how tech has streamlined the advertising process. So, let’s dive in.

Once Upon a Time in Digital Marketing

Not too long ago, digital advertising was anything but a streamlined process. It involved more than 42 steps before the ad impression ever got to the end-user. Yikes!

Advertisers had to negotiate with dozens of different advertising systems to secure ad placement. At the same time, publishers had to work hard to find advertisers who wanted to buy space on their site.

Of course, all of these steps meant a process plagued by human error. Real-time bidding first came onto the forefront to resolve some of these problems.

In the process, RTB has reduced paperwork, streamlined digital marketing, and facilitated buying media on a much larger scale than previously imagined.

At this point, it’s essential to make a distinction between RTB and programmatic advertising. RTB is how programmatic advertising gets realized, but they are not interchangeable terms.

Besides RTB programmatic marketing, there are also private marketplaces and direct ad buys. Each of these represent different processes for putting advertisers and publishers in contact. Yet, they all fall under the larger programmatic umbrella.

Learn more about the different types of programmatic advertising.

The Nitty-Gritty of RTB

Now that you’ve got a better understanding of the overarching concept behind RTB meaning, let’s dive into the nitty-gritty of the process.

Here’s a step-by-step look at how it works:

1. A user opens a web browser such as Google and completes a search
2. The user clicks on a link to a page with relevant information
3. The target page loads and the user sees an ad banner

This ad banner is the result of an automated auction that takes just 100 milliseconds to complete. In other words, the time gap between when the user clicks on the link and the link loads.

It doesn’t get any more streamlined than that! Especially when you consider the digital ad buy process once took days if not weeks.

Think of RTB as a universal system that unites all players in the digital ad sphere, including publishers, advertisers, and data providers.

Demand-side platforms (DSPs) represent the advertiser’s interests and supply-demand platforms (SSPs) the interests of publishers, helping them to get top dollar for their inventory (locations on their website).

How to Get Started with RTB

When it comes to RTB advertising, you probably have questions about how to get started. As an advertiser, you need to begin by entering an RTB environment and participating in dynamic auctions.

To do this, you’ll need to register with a DSP and then deposit a small budget into your account to launch your first campaign.

These steps occur through a DSP, which simplifies the process of purchasing ad inventory on advertising exchange platforms. A DSP allows for adjustable-price management of an RTB ad campaign as well as setup and impression purchase.

How do you pick the best DSP for your company? There are a few critical factors to keep in mind.

First, look for a DSP founded in a technology platform that’s agile enough to keep up with the breakneck pace of today’s marketing innovations and technology. This DSP should include data management platform (DMP) integrations.

Otherwise, your choice of DSP won’t be as effective. Think of the DSP you choose as the tool for execution and the DMP as the central intelligence unit. In other words, a DMP represents your hub for demographic and contextual data.

More Things to Keep in Mind as You Choose a DSP

You’ll also want to ensure that your DSP of choice meets the following criteria:

• Cross-device attribution
• Reporting and actionable insights
• Reach and scale
• Transparency
• Objectivity

Cross-device attribution allows your campaigns to appeal to consumers using multiple devices and channels. (Find out more about best mobile ad sizes for your next marketing campaign.)

As for reporting and actionable insights, you need to go with a DSP that provides you with both standard and customizable reporting. That way, you can act quickly on the marketing insights that you gain through ad performance.

By considering the reach and scale of a DSP, you guarantee your company’s ability to cast the widest net possible. That means looking for an advertising partner with global targeting capabilities.

Transparency represents another vital characteristic of a competent DSP. After all, you need to know exactly where your ad dollar is getting spent and the value of your media.

The same goes for objectivity. You’re in an industry where DSPs often sell their own media inventory. Talk about a conflict of interest!

In many cases, looking for an independent and objective DSP remains the best route.

RTB and DSP from an Advertiser’s Perspective

Now that you’ve got the tools to choose a transparent and objective DSP, let’s explore the process further. The DSP allows advertisers to optimize ad campaigns and set a targeting profile and budget framework.

From there, the advertiser can choose the niche audience they’d like to target as well as prioritize which websites upon which to focus their resources. This step is also when the advertiser blacklists any ad inventory they’d prefer to avoid.

Finally, the advertiser will create parameters around how much money to spend and how many ad impressions to serve per day.

The RTB Network in Action

On one side of the programmatic advertising sphere, you’ve got advertisers, and on the other, you’ve got publishers. Publishers rely on software known as a supply-side platform (SSP) to manage their digital advertising inventory.

The SSP also connects them with demand partners through RTB. How? By packing user data and sending a request to an ad exchange. This data includes who has entered their page and invites bids from advertisers.

The publisher’s request comes in the form of code and includes a minimum price for their inventory. It also contains stipulations about the currency accepted and the ad impression potential.

What happens when the request hits the ad exchange? If the ad impression proves valuable enough and the request matches their targeting options and advertising budget, then the DSP will bid on your behalf.

They do so by sending a request through their RTB protocol. This reverse request details how much the advertiser wants to spend on each ad impression. The DSP also includes a link to the ad creative and parameters.

Multiple DSPs do this at the same time, and the SSP collects their requests, analyzing each one to ascertain the highest bid.

It bears repeating here that this entire process occurs in a matter of milliseconds, which is astonishing when you analyze it in terms of its different steps.

Increased Exposure to Advertising’s Key Players

Gauging the effectiveness of RTB requires taking a look at multiple layers of evidence.

For one, RTB is used by various media buyers from large corporations with multi-million dollar budgets to small local businesses with no little more than $100 budgets. RTB is flexible and works with campaigns of any size and budget.

The RTB network also allows for more exposure to all of the key players in the digital marketing universe. These include media buyers of every stripe as well as a wide variety of publishers, from website owners to bloggers and app developers.

Each of these members plays a vital role in the RTB ecosystem, which is why it proves critical to connect to as many as possible.

Other Benefits of RTB Worth Considering

RTB auctions allow you to reach targeted audiences within the parameters of the optimal context at the right time. In other words, you get the best of behavioral targeting at your fingertips.

These factors ensure your ads are relevant to your audience, a critical element to marketing success. This approach also helps you build trust with prospects through personalized marketing applications.

RTB allows advertisers to receive ad impressions at affordable prices, which means greater control in optimizing their advertising budgets through monthly spend limits and price floors.

These precautions ensure that marketers always stay within their budget. Yet, at the same time, due to the precision of real-time bidding, they also eliminate wasted ad impressions.

RTB also minimizes expenditures, adjusting the bid based on the auction’s conditions in real-time. This flexibility guarantees more targeted impressions.

Finally, RTB campaigns allow marketers to obtain real-time actionable data. Gone are the days of watching an ad campaign crash and burn without the ability to make changes.

The Advertising Tools You Need to Succeed

Now that you’ve got an answer to the question, “What is RTB?,” what’s the takeaway?

From increased exposure to the key players in digital advertising to more targeted ad spend, there are countless benefits associated with leaping into real-time bidding and programmatic advertising.

Using this technology to your greatest advantage, however, requires professional assistance. Your company’s introduction to the world of RTB shouldn’t be a DIY venture. That’s where we can help.

At Media Shark, we work with businesses of various sizes, empowering them with hybrid digital marketing services. Contact us to learn about how we can collaborate to put your digital marketing on the right track with RTB.

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