Real-Time Bidding (RTB)

Real-Time Bidding (RTB) is the process by which a single ad impression is auctioned and sold in real time, in the milliseconds between a user requesting a page and the ad appearing. Each impression is priced and won individually rather than bought in bulk.

How it works#

The moment a page or app with an ad slot loads, the publisher side sends a bid request, a structured description of the impression, the user, and the context, out to buyers. Each buyer's bidding system evaluates the request against its campaigns and returns a bid, typically a CPM (Cost Per Mille) price. The auction picks a winner, the winning creative is returned, and the page finishes rendering, usually within about 100 milliseconds. This entire round trip flows through an Ad Exchange connecting supply and demand.

Why it matters#

RTB is the engine under most of Programmatic Advertising. It lets advertisers value each impression on its own merits, who the user is and where the ad will appear, instead of paying one flat rate for a whole placement. That granularity is what makes precise targeting and automated optimization possible.

RTB is standardized largely through the OpenRTB protocol, which defines the format of bid requests and responses. A related but distinct technique, Header Bidding, lets publishers solicit RTB bids from several exchanges at once before calling their ad server.

Related terms: Programmatic Advertising, OpenRTB, Ad Exchange, and Header Bidding.