Wondering what the Real-Time Bidding (RTB) system is? It is a process through which inventory for digital advertising is bought and sold. This process occurs in less than a second and advertisers are allowed to evaluate and bid in real-time on each available impression. This mechanism takes place on ad servers, ad networks, ad platforms, and bidding engines.
Let’s understand in detail from an app publisher’s perspective:
Real-Time Bidding or RTB allows publishers to auction ad space programmatically, on which advertisers can bid in real-time. You as a publisher can set a floor price for your ad space. If advertisers are willing to pay more for your app’s ad space, then the ad platform will automatically accept their request.
This price paid is referred to as a winning price. Likewise, if an advertiser’s bidding price is found high above other bidders, their ads will be preferred and automatically displayed on the interface of your application.
Since the whole process happens within 200 milliseconds, it is also termed instant bidding. Ad Exchange and DSPs (Demand Side Platforms) are the two most common platforms used in the process.
Real-time bidding gives publishers improved control over how to set a floor price, CPI and CPM they get, and the average revenue they may earn, etc.
How does real-time bidding (RTB) work?
Real-time bidding is a part of programmatic media buying and is facilitated by a supply-side platform (SSP) or an ad exchange.
Let’s understand how it works –
An advertiser aims at buying ad space in an app, the app owner has few ad units in his inventory. The advertiser then bids for these ad units as he can benefit through the user base nurtured by the app owner. Similarly, it also builds a revenue stream for the publisher.
Apart from bidding, RTB advertisers can also fine-tune the targeted ads, allowing them to focus on the inventory that’s more relevant and result-oriented to them.
Similarly, the app owner can also get higher CPMs for his inventory. This offers overall optimization for both the advertiser as well as the publisher.
What are the benefits of RTB (Real-Time Bidding)
Let’s explore the benefits of using RTB, and why being a developer or mobile app owner, you should consider them –
- Technology-Driven Accurate Pricing for The Bidding
- Optimized Ad Campaigns
- Beneficial To Both Advertisers & Publishers
- Control Via SSPs And DSPs In No Time
- Enhanced Understanding of Audience Behaviour and Interest
- Direct Sales Are Encouraged
- Transparency In the Bidding Cycle
- Improved Reporting Capabilities
RTB Advertising Vs. Ad Exchange
Real-Time Bidding Ads and Ad Exchange aren’t similar at all. Ad Exchange is a part of Programmatic Advertising and acts as a marketplace, whereas buyer and seller deal for the ad inventory.
On the other hand, RTB is a fully programmatic auction system in which DSPs (Demand Side Platforms) and SSPs (Supply Side Network) streamline the dealing process within an Ad Exchange (the marketplace).
It’s very clear that RTB or Real-Time Bidding has transformed the digital advertising inventory. The programmatic system of RTB has made the buying and selling activities even more manageable and well-optimized. Both advertisers and developers benefit from this programmatic interaction that leads to advancement in the bidding process.
It hardly takes a few seconds to get the whole thing done rightly with utmost precision. Owing to this significant feature, publishers, developers, and application owners ultimately earn more revenue. In a nutshell, RTB creates a win-win situation for all.
Would you like to know more about RTB or any other such mechanism within the advertising technology? Simply connect with our experts to take your mobile application to the next phase of revenue generation.