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The Birth and History of Real Time Bidding

The internet advertising is a typical field of expertise where buying the right ad inventory and ad space moments before a website loads on the user’s screen. Before RTB, the prices of the ad inventory were placed at a fixed rate and impressions were sold on first come first serve basis.

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The internet advertising is a typical field of expertise where buying the right ad inventory and ad space moments before a website loads on the user’s screen. Before RTB, the prices of the ad inventory were placed at a fixed rate and impressions were sold on first come first serve basis. This posed a serious problem for several advertisers as during certain times of the day the impressions were entirely useless due to low traffic and most advertisers rushed to buy the best available inventory. Before internet advertising could succumb to the mindless buying frenzy of ad space, RTB was discovered as the means to rightfully distribute the ad inventory to post ads online. Discovered in 2009, RTB functions in a manner similar to a stock exchange where a marketplace known as the ad Exchange enables advertisers to buy and sell ad space and ad inventory from the publishers.

How RTB Works?

RTB works in the following steps:

  • A user clicks on a link to a webpage prompting it to load
  • Before the page loads the publishers send out a request for bidding that goes straight to the demand sources like the DSPs and SSPs. The request already contains the information related to each impression.
  • The various demand sources take this information into account and then calculates the value of each impression as per the various advertisers. The DSPs and the SSP then make bids for each ad inventory or impressions based on the data pre entered by the advertisers.
  • The highest bidder is rewarded the ad space and the winning ad is displayed in front of the user.

Understanding RTB

Despite of the several similarities RTB is way different from the stock market. The major difference being you can lose a lot of money in the stock market but not with advertising. There can be a case where the ad campaign fails due to poor quality and doesn’t live up to the expectations of the company. This is a potential failure for the company or the advertisers but the loss is pretty intangible as compared to the loss of physical money in the stock exchange. The ad campaigns usually work and are based on the overall ROI and the amounts of customers gained. Several platforms like mobile and facebook exchange (FBX) etc. are the potential RTB markets of the future and several users have already started exploiting their potential.

Optimization through Automation

Similar to a stock market, there has been a steady growth in the demand for ad inventory and impressions and it is only time before we experience a situation where we shall simply run out of supply. Implementing real time bidding as indeed optimized the growing demand while providing everyone a fair chance to bid on their desired ad inventory and impressions. The automation interface or the demand sources (DSPs and SSPs) have further channelized the procedure of buying impressions from the various publishers across the internet. The advertisers can now enter the various parameters according to the market analysis and the impressions that correspond to their target audience. The automation not only saves a lot of time but also saves on the number of wasted impressions. RTBs automation removes a lot of stress and workload from the head of the advertisers who are trying to get their ads placed just fractions of a second before a website loads.

The history of Real Time Bidding and its functions is indeed a vast and complicated topic, which cannot be entirely summed up into a single paragraph. The various users as we know are people who might not have a single clue about how an ad appears before them what goes between the few moments when they click on a particular website and it loads.

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