Real-time bidding, or RTB, has forever changed the future of programmatic advertising. We’ve found, however, that there can still be some confusion about what it actually is. Here’s a primer, in plain English!
In simple terms: real-time bidding, or RTB, is the automated buying and selling of digital media, or ad impressions.
Traditionally, media buying is a manual process that involves buying directly from salespeople, requests for proposals, or RFPs, and the constant trading back-and-forth of change orders. Organized chaos is a good term to use when describing the process of traditional media buying.
Programmatic media buying, however, is quicker, data-driven, and saves much more energy and money. It’s executed through automated processes where data, technology, and software consolidate data into a single dashboard that can be used in-house.
So… how does it work?
- The user visits a webpage that has an open advertiser placement. This is the beginning of the RTB auction lifecycle.
- An ad exchange or SSP announces the available bids to the bid manager. This is where your creative types & sizes and targeting strategies come into play.
- The bid manager evaluates the advertiser’s targeting and bids it matches. The auction then takes place for the open ad inventory, and in the instance that an advertiser is using Choozle to run programmatic ads, we will facilitate the bid in the auction — if it’s a match — to the open ad placement. Advertisers always win inventory at the lowest possible CPM, but the base bid acts as a foot-in-the-door to these live auctions.
- Finally, the winning advertiser serves the ad (and wins the impression). All of this takes place while a user is waiting for a webpage to load, AKA, under 200 milliseconds!
Key takeaway: Programmatic advertising and RTB go hand-in-hand. With programmatic, there’s no back and forth on the phone or dreadfully long email chains. Just near-instantaneous media buying, complete transparency, control over everything from creative, to cost, to targeting & beyond, and ease of optimization right at your fingertips.