RTB and Programmatic Buying Ecosystem

RTB: Real-Time Bidding refers to the buying and selling of online ad impressions through real-time auctions that occur in the time it takes a webpage to load. Those auctions are often facilitated by ad exchanges or supply-side platforms.

How RTB Works:

As an ad impression loads in a user’s Web browser, information about the page it is on and the user viewing it is passed to an ad exchange, which auctions it off to the advertiser willing to pay the highest price for it. The winning bidder’s ad is then loaded into the webpage nearly instantly; the whole process takes just milliseconds to complete.

Advantages of Programmatic Advertising:

Ø  Programmatic Advertising Optimizes Ad Budget

Ø  Programmatic Advertising Offers Real-Time Data and Insights

Ø  Inventories are becoming more and more qualitative

Ø  Advertisers benefit from the improved performance of their campaigns and higher their productivities.

Ø Real Time Bidding (RTB) that allows companies to buy ads on demand, not months in advance. No minimum impressions are required and advertisers can react immediately to changing market dynamics.

Supply-Side Platforms(SSP): A supply-side platform is a piece of software used to sell advertising in an automated fashion. SSPs are most often used by online publishers to help them sell display, video and mobile ads. Example: Google, OpenX, PubMatic, Rubicon Project, AppNexus, Right Media and AOL.

Demand-Side Platforms (DSP): A demand-side platform is a piece of software used to purchase advertising in an automated fashion. DSPs are most often used by advertisers and agencies to help them buy display, video, mobile and search ads. Example: MediaMath, Turn, DataXu, Google Adwords.

How DSP & SSP Work:  It’s complicated. The short version is that DSPs allow advertisers to buy impressions across a range of publisher sites, but targeted to specific users based on information such as their location and their previous browsing behavior. Publishers make their ad impressions available through marketplaces called ad exchanges, and DSPs automatically decide which of those impressions it makes the most sense for an advertiser to buy. Often the price of those impressions is determined by a real-time auction, through a process known as real-time bidding. That means there’s no need for human salespeople to negotiate prices with buyers, because impressions are simply auctioned off to the highest bidder. That process takes place in milliseconds, as a user’s computer loads a webpage.

FIG: Ecosystem