RTB stands for Real-Time Bidding. It is a media buying process that appeared around 2009.
To this day, some people, even in the industry, still confuse programmatic and real-time bidding. Although connected, they are not the same.
Programmatic is the automation of the media buying process. It can happen through RTB (also called open auctions) and private marketplace (PMP), which both work in real-time, and programmatic direct. We can go about it with the logic that RTB is definitely programmatic, but programmatic is not necessarily real-time bidding.
But let’s focus on the first one: real-time bidding. When a user tries to access a website, an auction between advertisers will be generated to sell the ad placement. The process usually happens between 0.2 and 0.5 seconds. As a frame of reference, think that the blink of an eye lasts 0.4 seconds.
As we have seen, real-time bidding is a programmatic media buying process used by advertisers to run their campaigns, and by publishers to sell their ad inventory. Here is how it works:
While there are numerous advantages to RTB for both advertisers and publishers, let’s focus on the main ones.
On the buying-side, RTB ensures a more precise targeting than bulk buying due to the amount of information available on the user at the moment of connection. This ensures the ad served will be more relevant to the consumer and thus, that the budget is optimized. Also, as RTB allows for real-time reporting, advertisers can gain great insight on their campaigns’ performance and optimize their strategy accordingly.
On the publisher’s side, RTB allows, of course, a better monetization of inventory, as buyers will maximize the value of the impression. Also, it helps them gain in-depth insight on their audience and see what segments respond better to what time of advertising. This insight can help them build a more tailored inventory to access high-performing demand.