Real-time bidding (RTB)
In short
Real-time bidding (RTB) is an automated auction in which advertisers bid for a single ad impression in the fraction of a second while a web page or app loads. The highest bid wins, and its ad is shown to that user.
RTB is the auction method used in most programmatic advertising. It connects buyers using demand-side platforms with sellers using supply-side platforms through ad exchanges. It is a way of buying impressions, not a platform in itself.
How real-time bidding works
- 1. A user opens a page: The publisher has an ad slot to fill.
- 2. A bid request is sent: The SSP or exchange shares details about the slot and the user, such as context, device, and location.
- 3. DSPs evaluate and bid: Each buyer checks the request against campaign targeting and returns a price.
- 4. The auction closes: The highest eligible bid wins, and the ad loads, all within about a tenth of a second or so.
Auction types
Many RTB auctions now run as first-price auctions, where the winner pays what they bid. Older ones used second-price rules, where the winner paid just above the next bid. Check which model your platform uses, because it affects bidding strategy.
How B2B teams use RTB
RTB lets B2B teams show ads to specific audiences instead of buying fixed placements. Say a team targets people at 300 named accounts, sets a maximum price per thousand impressions, and caps frequency at a few views per week. Bids only happen for matched users, so spend stays near the target accounts.
Benefits and risks
- Precision: Pay for impressions that match the audience, not a whole page.
- Speed: Campaigns can be adjusted quickly based on results.
- Fraud and low-quality inventory: Some impressions are fake or poorly placed. Use verification tools and review placement reports.
- Privacy: Bid requests contain user data, so consent and data rules apply. This is general information, not legal advice.
Common mistakes
- Bidding without a cap: Set maximum bids and daily budgets.
- Ignoring placement reports: Check where ads ran.
- Optimizing for cheap clicks: Cheap clicks may not come from target accounts.
Real-time bidding FAQs
What is real-time bidding (RTB)?
Real-time bidding is an automated auction where advertisers bid on individual ad impressions in milliseconds as a page or app loads. The highest bid wins and its ad is shown to that user.
How does real-time bidding work?
A publisher sends a bid request with details of the ad slot and user to an exchange. Demand-side platforms evaluate it against campaign rules and return bids. The highest eligible bid wins and its ad loads in the slot.
What is the difference between real-time bidding and programmatic advertising?
Programmatic advertising is the broad practice of buying ads through software. Real-time bidding is one auction method within it. Other programmatic deals, such as private marketplaces or guaranteed buys, are not open auctions.
Is real-time bidding used in B2B marketing?
Yes. B2B teams use it through demand-side platforms to show ads to specific accounts or audiences, with budget caps and frequency limits. It is often used in account-based advertising alongside outbound outreach.
