What is Real-Time Bidding (RTB)?
Real-time bidding, often abbreviated to RTB, is an essential aspect of programmatic advertising—when ads are bought and sold in real time and on a per-impression basis.
How Does RTB Work?
Here’s how the real-time bidding process works:
- First, publishers offer up ad space to advertisers.
- Second, advertisers bid on single impressions in real time.
- Third, the advertiser with the highest bid wins the auction.
- Fourth, the winning advertiser’s ad is shown to app users.
Thanks to technology, this four-step process happens in the blink of an eye, allowing advertisers to bid, win, and display highly-targeted ads.
Advantages and Disadvantages of Real-Time Bidding
The advantages of real-time bidding are clear: advertisers are able to target the exact users they want to convert, without wasting time and money on users who don’t fit their ideal user profiles. And publishers can easily adjust pricing to increase revenue.
There are disadvantages to the real-time bidding process, too…
RTB doesn’t allow advertisers to control the context surrounding their ads’ or publishers to control the exact content of the ads on their platform(s). This means that an ad promoting cheap flights may run directly after news stations report on a deadly plane crash. This lack of control may harm the reputations of both advertisers and publishers.