Programmatic methods: the Real Time Bidding (RTB) explained

Real time bidding (RTB) is a method that enables a so-called open auction, that means the inventory is available to purchase for all the demand sources that have access to the ad exchange.
Remember RTB is a type of programmatic adv, but not all programmatic methods uses RTB.
Let’s go over the process:
– Ad sellers auction the ad inventory to ad buyers who place a bid.
– Buyers have set buying parameters such as the bid price, an inventory reach, which audience or User ID are trying to reach and many other targeting criteria. Optimization happens on the buyer side thanks to commands set in the DSP.
The buyer decides which ad impressions to buy, at which starting price is willing to buy it and what maximum price or budget is willing to spend.
The seller on the other hand, defines the floor price rules with granularity in accordance with inventory, formats, ad frequency and other criteria.
RTB creates efficiency. Using the ad exchanges and other AdTech platforms, buyers can access a huge range of inventory and gauge prices to the impressions they deem most valuable to them according to the targeting criteria.
On the other hand, RTB enables pubs to open their ads up to an auction, but to set a reserve price that must be met in order for a transaction to take place.
Other sources: see in the LinkedIn comments.
Previously posted by Luca Brighenti via LinkedIn. 

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