What is Real Time Bidding And How Does it work In Advertising? 

RTB (Real-Time Bid Management) is an advertising technique that allows multiple advertisers to simultaneously participate in an auction for the right to show their ad to a specific user on a bidding platform. As a rule, RTB is used in media or video advertising by real-time bidding companies like Polus.media.

The RTB approach to advertising differs from the traditional one in that instead of selling a place and impressions on a site, a specific user with specific interests is sold, who is right now on the site looking for some information. Real-time bidding works as an auction in which advertisers compete for a given user in real time at a moment of loading the page on which the advertisement is to be placed.

What is Real Time Bidding

The site selling ad slots (the Marketplace) sets the ad network code (SSP), which will display banners of a given size in a given place on the page, usually, powered by a JavaScript code. Also code trackers or providers of information for targeting (DMP) are placed. This code can be uploaded by the ad network itself or by scripts separately connected to the page.

At a moment as a user visits a page, the ad network code identifies the user (via cookies); then the ID is searched for information about its profile, interests, etc. with targeting providers (DMP). This can be either one source or several and the request for information about the user occurs on the client, i.e. in the browser, because cookies are required to “glue together” the user’s internal ID on the site and his/her global profile, accumulated over the history of his/her activity on the Internet, profiles in social networks, etc. Targeting providers build a portrait of the user’s interests, and this data is collected and transmitted directly to the advertising network along with the banner request.

How it Works

The advertising network, receiving a request to display a banner, combined with information about the user’s ‘profile’, puts this user up for ‘bidding’ using an auction service (DSP). At the same time, the advertising network and auction site may belong to different companies and operate independently of each other as a service or aggregator. Technically RTB works under the open protocol ‘Open RTB’. Advertisers in the advertising campaign settings prescribe targeting for various interests and behavioral factors of the user and set the maximum payment levels for the display depending on the coincidence of the query history, socio-demographic factors, the user’s location, etc. Data on bids using the API are uploaded to the auction site regularly or even in real time.

In order to choose whose ad to show to the user, candidates are selected based on criteria to whom this user “fits” and then the maximum bid is selected. The advertiser who wins the auction usually pays not the maximum bid but the “second price” – to make a process fair.

In order for the system to work stably, it is necessary that all components are responsible for the minimum possible time while the page is loaded in the browser. The advertising network should quickly give the code that controls the collection of data and sending a request for a banner. Providers of information for targeting must quickly and asynchronously (hundreds of milliseconds) return information about a user’s profile or its global identifier, using which the user’s profile can be obtained on the server(s).

The auction site should very quickly aggregate data about the user’s interests and ask the auction participants whether this user is interesting to them (if the preloading of the display and targeting rules is not implemented). Advertisers must very quickly return the rate they are willing to pay for displaying their banner to this user in exchange for user profile information.

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