Real Time Bidding

Mapendo Team
March 31, 2022

Nowadays, in mobile app marketing, programmatic advertising is essential. In this context, we need to take some time to talk about one type of programmatic advertising: Real time bidding

What is RTB?

Real time bidding (RTB) is a form of programmatic media buying. It is a subcategory of programmatic media buying and refers to the practice of buying and selling ads in real time on a per impression basis in an instant auction. 

In the RTB instant auction, supply-side platforms (SSPs), on behalf of publishers, and demand-side platforms (DSPs), on behalf of advertisers, sell and buy ads. In an RTB auction, DSPs therefore bid in real time on the ad placements provided by the SSPs.

Let's take a look at the steps that make up this process.

1.             In the RTB auction, an SSP makes advertising placement available on publishers' apps via an RTB exchange.

2.            DSPs make an offer which must comply with the targeting criteria previously set by the advertisers. That is to say, advertisers only make these auctions for impressions that meet the targeting options they have. There are many targeting options that can be selected, such as device, operating system version, country, ISP (internet service provider), connection (wi-fi or mobile) and even age and gender.

3.            The advertiser making the highest bid is awarded the impression and its ad will be shown in the publisher's app. 

Furthermore, within these exchanges there are not only auctions, but also private deals between DSPs and SSPs can be negotiated. In these cases, the two parties set a fixed price and there is no auction, only that particular DSP buys traffic in a particular SSP.

A variant of this is the private auction where there is an auction, but only between a few selected DSPs that have made arrangements with an SSP.

In auctions, DSPs pay for impressions "on a CPM basis".

 

Why is it important?

Real Time Bidding is effective and has numerous benefits for both advertisers and publishers and for everyone who is involved.

It allows advertisers to complete more efficient and targeted purchases, it allows them to obtain the benefits of efficient spending, optimize impressions, have a narrow targeting, exploit new insights and trends based on user behaviors. 

For publishers it is effective because it allows them to increase revenue since in an real time bidding auction there is a high number of buyers and therefore more competition and higher prices for their ad inventory.

 

What you need to know about RTB?

  • In RTB, the whole process takes just a few milliseconds and it's all programmatic.
  • With RTB each advertiser can bid on impressions from a target audience.
  • Real Time Bidding saves advertisers time as bids are made in real-time online auctions, which means that they can avoid organizing direct deals with certain publishers.
  • Are RTB and Programmatic Advertising the same thing? The two terms are usually used interchangeably. However, they are not the same thing. Real-time Bidding is a subcategory of programmatic media buying. Programmatic advertising is a form of ad buying that uses technology to automate and speed up the process.