Manually purchasing ad inventory is a process that is not just outdated and time-consuming but also immensely monotonous. And even if you can push past the tedium of it all, manual techniques still only work to distract you from more practical activities, like planning your next marketing campaign.

Real-time bidding (RTB), however, represents the solution to all these issues. Join us below as we dive into the question of “What is real-time bidding?” We'll cover everything from who should use it to how the process works so you can decide whether the strategy is a good fit for your business.

What Is Real-Time Bidding?

RTB is a technology-driven process that allows advertisers to bid on ad inventory as soon as a user loads up a webpage. The entire process happens in milliseconds, making it one of the most efficient ways to buy ad space.

The RTB approach represents a shift away from traditional ad purchases, which required you to manually connect with publishers, negotiate rates, and purchase space in bundles.

That sort of bulk-purchase approach was held back by a few major flaws. For starters, you had little control over who saw your content. It was also difficult to change your strategy or clamp down on your budget once you've paid for a huge chunk of advertising inventory.

Conversely, RTB now allows you to adjust on the fly. You can change your budget, per-impression bid amount, and targeting criteria to optimize campaigns. The end result is improved reach, more value to your advertising dollar, and higher engagement.

How Does the Process Work?

Here's a basic rundown of how RTB works:

1. Publishers Use an SSP

Most publishers list their inventory using a supply-side platform (SSP). These platforms aggregate ad space and allow publishers to set minimum pricing limits for their inventory. From here, publishers will then list their inventory on an ad exchange, a digital marketplace for both publishers and advertisers.

2. You Set Up a Campaign on DSPs

Most advertisers use demand-side platforms (DSPs), the advertiser equivalent to SSPs, to access exchanges and set up programmatic campaigns. When creating your campaign, you'll need to define your target audience. Some information you will need to provide includes:

  • Demographic details
  • Behavioral information
  • Location preferences

You will also need to set your budget and per-impression bid amount. If you are targeting multiple types of ad space, you can set different bid limits for each category.

3. Users Visit a Site

After your campaign goes live, you can start participating in RTB. Users unknowingly initiate the process when they click on a search result. In the background, the SSP sends information about the user to the DSP.

The DSP compares that information against the campaign criteria of each advertiser. If a user visits a website with available ad space and meets your targeting criteria, your content will be entered into the auction.

4. The RTB Auction Kicks Off

Next, the real-time bidding auction takes place. The DSP and SSP compare bids and select the winner based on the highest amount.

5. The Winner Gets the Impression

If you win, your content will be displayed in the designated slot, and your account will be billed. If not, you will not be charged, though you will have to wait until the next auction to try again.

Who Should Use RTB?

If you advertise online, RTB can be a great tool for diversifying your marketing mix and getting content in front of high-quality leads. On the flip side, if you have ad space you want to sell, participating in RTB via an SSP can help you get top dollar for your inventory.

Let's further unpack the benefits of RTB for publishers and advertisers:

Why Advertisers Should Use RTB

As an advertiser, RTB provides a wide range of benefits and allows you to market more effectively. From a control standpoint, you can set a total budget and bid amount that allows you to get the most amount of impressions possible for your money. More importantly, you can minimize waste by setting targeting criteria that align with your service area and preferred customer base.

Additionally, RTB solutions simplify ad purchasing, allowing you to spend more time on more dynamic work, such as creating content or strategizing. You won't have to reach out to individual publishers and can instead buy ads on a per-impression basis, adjusting your campaign as needed.

Why Publishers Should Use RTB

If you've got ad space to sell, the RTB process accomplishes a few objectives. First, it allows you to get top dollar for your inventory, as multiple advertisers will be competing for slots. You can also avoid the hassle of selling slots in bulk, which can lock you into a specific purchase price and prevent you from capitalizing on-demand changes.

Bid in Real Time and Make Every Dollar Count

Adopting an RTB strategy means stepping into the future of ad purchasing. Stop selling and buying ad space the old-fashioned way. Modernize your approach and maximize your results today!