Real Time Bidding – a new technology in the online advertising industry

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Today, the media Internet advertising market demonstrates the following trends: the audience approach (focusing on the characteristics of the audience), RTB (Real Time Bidding), and also demonstrates strong signals from the search, context, and user profiles. So, what is RTB or Real Time Bidding which has become so popular nowadays?

Real Time Bidding

Real Time Bidding or RTB is a relatively new technology in the online advertising industry, which is an auction of real-time advertisements. In this auction advertisement platforms with advertising spaces act as sellers while advertising systems representing the interests of advertisers (Demand Side Platform, DSP) act as buyers.

The cost of ad placement is determined by the principle of the auction of the second price: to win the battle for placing your advertising, the advertiser pays a price exceeding other current offers. The winner of the RTB-auction (advertiser or agency) gets the right to show his advertisement at the offered price.

How does it work?

Let’s consider how the RTB works on an example of Face2Trade which is the leading global real-time advertising platform. The system when getting the request to display an advertisement does the following:

1. Classifies the request according to the maximum number of parameters: the platform which the user entered, the user data (if available), time, retargeting data, etc.
2. Gives information about the request and the user to the systems of advertisers (ad networks) and receives from them the rates on which they are ready to buy this show;
3. Chooses among the responses received the highest rate and discounts it to the minimum necessary to win the auction;
4. Receives an advertisement from the winner and passes it to the user’s browser in response to an advertisement request.

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RTB technology allows conducting an auction between platforms and selects a banner to show the user right at the time of page loading, in real time. RTB technology also allows minimizing the costs of advertisers. DSP-systems representing their interests are configured in a way to offer the lowest possible price for each show – if the campaign parameters set by the advertiser are met.