RTB

Real-Time Bidding (RTB) is a method of programmatic advertising in which each available ad impression is auctioned in real time to advertisers. When a user loads a webpage or opens an app, the publisher’s supply-side platform notifies an ad exchange about the impression. Demand-side platforms bid on the opportunity using data about the user, context, and predicted engagement. The auction occurs within milliseconds, and the winning bid’s creative is served in the ad slot.

Most RTB operates as a second-price auction, where the highest bidder wins and pays the second-highest bid. Some markets and setups have moved toward first-price auctions, where the winner pays its own bid. The process is highly automated and enables advertisers to target audiences with granular data while publishers monetize inventory at scale.

Key participants include publishers (supply), ad exchanges and supply-side platforms, advertisers (demand), demand-side platforms, data providers, and measurement or verification services. Open standards such as OpenRTB help ensure interoperability between platforms. Variants within programmatic advertising include private marketplaces, programmatic direct deals, and header bidding, which can affect latency and yield.

Advantages of RTB include improved targeting, scalable reach, and dynamic pricing. However, it faces challenges such as privacy and data protection concerns, ad fraud, brand safety, measurement accuracy, and latency. Regulatory frameworks like GDPR and CCPA influence how data can be used in bidding.

Notes: RTB is primarily associated with Real-Time Bidding in online advertising, but the acronym can also stand for other terms in different domains, such as Round-Trip Time in networking. This article focuses on the advertising context.