Real Time Bidding – This is one of the most fundamental topics of Online Advertising.

What is RTB? From the name – Bidding, it sounds like an auction. And when you imagine an auction in the context of the advertising industry then you think it must be an auction of advertising resources. Right? That’s correct. RTB is nothing more than an auction of display inventory where advertisements are shown.  Different advertisers bid on this inventory and the highest bid generally wins. For that reason, advertisement with the highest bid is displayed on the publisher’s website. Is that very simple enough? That’s great. Now, lets go into more detail.

Let’s understand the process step by step. A user opens any website e.g. ABC.com This triggers a bid request that can include various pieces of data such as user’s behavior, browsing history, location, user’s profile (interests, past history of view and purchase etc.) and the page being loaded. The request goes from the publisher to an ad exchange, which submits it and the accompanying data to multiple advertisers who automatically submit bids in real time to place their ads. Advertisers bid on each ad impression as it is served. The impression goes to the highest bidder. Therefore, the ad request is routed to the Ad Server of the advertisers who win the bid. And their ad is then served on the page.  This process is repeated for every ad slot on the page. Real time bidding transactions typically happen within 100 milliseconds. Remember this – it takes 300-400 milliseconds for an eye to blink.
Seems very logical and simple. However, the criteria for bidding on particular consumer types can be very complex, taking into account everything from very detailed behavioral profile to conversion data.

Demand Side Platform (DSP)
What is DSP? The DSP interfaces with agencies or advertisers, stores user targeting parameters set by these advertisers, and on behalf of the advertisers the DSP automates the traffic buying process. Now, why the hell was DSP introduced?

The answer to the above question lies in my next question – Do you think an average advertiser is going to bid in all auction and to decide the exact price for each impression being bid and served? Definitely Not. DSPs are designed to give advertisers greater control over pricing, targeting, and managing their online media campaigns. Their mission is to eliminate some of the inefficiencies of the traditional display media-buying model — through automation and advanced analytics — in order to make those improvements possible.

Ad Exchange
Who will auction display inventory? An Ad Exchange. An ad exchange is a technology platform that facilitates the bidded buying and selling of online media advertising inventory from multiple ad networks. The approach is technology-driven as opposed to the historical approach of negotiating the price on media inventory.

Publisher and/or Supply Side Platform (SSP)
The publisher is a website or an app that provides inventory. However, the publisher may manage multiple advertising networks and use supply side platforms (SSPs) to manage the yield of advertising. Supply side platforms utilize data generated from impression-level bidding to help tailor advertising campaigns.