The evolution of Real-time bidding (RTB)
Real-time bidding (RTB) is a method of selling and buying online display advertising in real time, one ad impression at a time. It is also sometimes referred to as programmatic buying/selling. Instead of bulk and inventory-centric buying, RTB mimics stock exchanges and utilizes computer algorithms to automatically buy and sell ads in real-time.
How it works: A certain user visits a website with one banner space, and the banner inventory has not been sold. A call is then made by the exchange server (database web server) supporting Real Time Bidding (RTB) to the Demand Side Platforms (DSP) or Ad Networks (Ad Exchanges) to determine which advertiser gets to serve the ad. Each user has an associated set of attributes (cookies), which is transferred from exchange server to the DSP and determines whether the user has the desired attributes (cookies) that the advertiser wants to target. Based on the perceived value of this user, a bid is placed on this ad impression by relevant advertisers and the highest bidding advertiser gets the placement.
The RTB pushes the limits of targeting and optimization of Internet advertising. But because of the level of complexity that it can reach, only companies with specific expertise in Internet advertising management will take full advantage of RTB capabilities.