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Real-time bidding can be compared to a stock market, where the amount of demand at the moment determines the price of a stock. With real-time bidding, publishers set the floor price for an ad, but the demand still determines the final price.

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This RTB process ensures that ad inventory is sold at the best possible price fairly and transparently, benefiting both publishers and advertisers by efficiently matching supply with demand.

To participate in open auctions a business should use a demand-side platform. To get started, they can use a SaaS solution. In this case, a media buyer creates a free-of-charge, self-serve account in a third-party DSP and quickly set their first ad campaign. On self-serve DSP campaigns, the ad spend includes the money paid per impression to publishers plus hidden bid markups. Businesses with small paid marketing budgets still benefit from this model, though. On low-volume campaigns, the vendor’s markup of 10-50% on every impression price doesn’t translate into big expenses. Still, companies with big budgets might be willing to use a proprietary DSP to save money. In this case, the company owns the platform and doesn’t have to pay any extra on top of their bids.

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The difference is that while RTB utilizes programmatic advertising, not all programmatic advertising uses RTB. For example, advertisers can programmatically purchase inventory directly from publishers instead of bidding on an open market with RTB.

In terms of pricing, publishers determine the floor prices of ads, with transaction prices fluctuating based on supply and demand.

The RTB process occurs in milliseconds before a website even loads. You won’t even notice it happening! That’s faster than I can even say this sentence!  RTB in advertising is a part of the programmatic advertising process. It involves three platforms for ad buying: 

Essentially, while all RTB auctions fall under the programmatic advertising umbrella, not all programmatic advertising techniques use RTB. Other types of programmatic media buying include:

Standing apart from other CTV platforms, Performance TV doesn’t co-mingle inventory with traditional video inventory to garner more impressions for advertisers or drive down costs. If you pay for TV inventory, you get TV inventory.

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Before the bidding begins, advertisers set targeting click here parameters, such as maximum bid price and target audience. These parameters are essential for determining which impressions the DSP will bid on.

Publishers are websites visited by users and can range from personal blogs, mobile apps, news sites to social media platforms. Publishers possess advertising inventory, which they want to fill with ads in exchange for revenues from advertisers.