RTB Meaning in Marketing and Business: Full Guide

In programmatic advertising, RTB is likely to be the most popular choice since it implies automation and high personalization, and supports effective conversion rate optimization.

But what is RTB in marketing? What does RTB stand for? What are the benefits for advertisers and publishers? What challenges to consider?

This guide is here to clarify the RTB meaning, provide you with some examples, explain the advantages, and more. Offering insights for advertisers, publishers, and ad exchange owners, we explore RTB in detail – keep reading to enhance your knowledge.

What is RTB in marketing?

Let’s start with the basics. So, what does RTB stand for in marketing? RTB stands for real-time bidding, and this technology is designed to automate the process of buying and selling ad inventory through auctions. It operates on the principle of demand and supply. Publishers offer their ad inventory via ad exchanges (or networks). In turn, advertisers bid on the inventory. The highest bid wins. 

RTB revolutionized digital advertising by significantly reducing the amount of manual work, especially for marketers.

In traditional digital advertising, they need to look for relevant publishers manually, get in touch with them, ask for their requirements, etc. What is a bid request? RTB eliminates all these processes and allows advertisers to deliver their ads to the most relevant audiences within just a couple of seconds (or even faster). 

As for publishers, RTB is their guarantee that they will receive the highest possible payment for their inventory. 

This way, all the parties involved can focus on their core tasks instead of doing everything manually. Yes, some settings are required, but establishing the connection between advertisers and publishers is automated. 

RTB in programmatic advertising

Now that the RTB full form in marketing is clarified, let’s dive deeper into its programmatic aspects.

Relationship between RTB and programmatic

RTB is a core buying method within programmatic advertising. While programmatic refers to the automated buying and selling of ad inventory using technology, RTB is the auction-based mechanism that determines which ad is shown to a specific user in milliseconds.

Open auction vs private marketplace

In open auctions, ad inventory is available to everyone, offering scale and efficiency. Private marketplaces (PMPs) are invite-only auctions where premium publishers offer inventory to selected advertisers, providing greater control, transparency, and higher-quality placements.

Header bidding and RTB

Header bidding enhances RTB by allowing multiple demand sources to bid simultaneously before the ad server makes a decision. This approach increases competition, helps publishers maximize yield, and gives advertisers fair access to impressions.

How real-time bidding (RTB) works

A real-time auction does not take place on its own — the RTB ecosystem involves several key components:

• A demand-side platform (DSP) is used by advertisers to set up their campaigns, purchase ad inventory, monitor performance, and adjust strategies;

• A supply-side platform (SSP) is used by publishers to list their ad inventory and set pricing;

• An ad exchange plays the role of an intermediary between a DSP and an SSP, and it is exactly where an auction takes place. It ensures the auction itself and RTB transactions are completed in no time.

So, how does ad bidding work? Here is the RTB process explained in detail.

Step 1: a user visits the website

First, a user visits the publisher’s website, and the browser collects their data. Note that more and more programmatic advertising platforms are switching to contextual targeting instead of cookies, which is a benefit since cookies are steadily fading away.

Then, the publisher’s website creates a bid request to inform an SSP that the ad impression is available.

Step 2: an SSP joins the process

After this, a supply-side platform analyzes the request and sends it to a DSP, along with the available data and information regarding the bid floor.

Step 3: a DSP analyzes the request

Prior to the above-mentioned steps, advertisers set their campaign parameters via a DSP, which involves adding creatives, setting targeting and daily spend, etc. Then, after a DSP receives the request, the platform analyzes its relevance compared to the specified parameters. 

The bid is sent to the ad exchange if the impression is relevant. 

Step 4: the real-time auction takes place

The RTB auction starts on the ad exchange. After the winning ad is identified, it is sent to the publisher and displayed to the user. The entire ad bidding process may seem complex, but it happens automatically within a very short time. 

“RTB is where technology, data, and value meet. It’s not just an auction – it’s the mechanism that allows programmatic advertising to deliver relevance for marketers and efficiency for publishers.”

Roman Vrublivskyi

CEO of Attekmi

Benefits of RTB for advertisers and publishers

What does RTB mean in marketing? Actually, it offers multiple benefits for all the parties involved, and this is not only about automation. Here are the advantages of using RTB technology for advertisers and publishers.

Benefits for advertisers

Here are the main benefits for marketers:

• More effective targeting: With RTB in marketing, marketers do not buy just an ad placement. Instead, they purchase an audience, meaning that their ads are delivered exactly to those users who are likely to get interested in their products or services. Since RTB allows precise targeting, the conversion rate and income will increase, as well as the ROI of the ads.

• Ad spend optimization: Launching ad campaigns via a real-time auction gives advertisers full control of their budget. They set the bids on their own, preventing unnecessary expenses. Besides, they can adjust their bids in real time according to the results of the auctions. In general, RTB is among the most cost-effective options in digital advertising, as marketers can spend their budgets on high-value impressions.

• Real-time decision-making: With programmatic technology, tracking and analysis get much easier. Advertisers can monitor the performance of their advertising campaigns on their own and get real-time reports. This way, their strategies get flexible, as they can adjust them in real time without waiting for publishers to provide them with some data. 

• Brand protection: A lot of demand-side platforms offer extra features to help them ensure brand safety. For instance, this can be an opportunity to create a black and whitelist of publishers. 

Benefits for publishers

Now, let’s take a look at the RTB benefits for website (and not only) owners.

• Access to a wider pool of advertisers: Within a programmatic ecosystem, publishers can offer their inventory to a larger and more diverse pool of advertisers from all over the world. This can help increase both the fill rate and revenue. For advertisers, this advantage works as well. Access to multiple publishers can help them enter new markets when needed.

• Relevance: Programmatic ensures relevant ads for website visitors, so their experience will not be interrupted, only complemented. Therefore, if the website offers quality content, they will keep visiting it and help a publisher monetize ad inventory.

• Cost-effectiveness: While advertisers benefit from ad spend optimization, publishers monetize their inventory on their own terms. After determining the pricing, the RTB auction ensures they receive the highest possible revenue. Besides, with RTB, publishers can monetize even the ad inventory that was not in demand before, maximizing their revenue. 

• Inventory management: Since publishers take part in RTB auctions via supply-side platforms, they get better control over their inventory. For instance, they may block certain ads or approve advertisers they prefer to cooperate with. Everything can be done from a single platform.

Role of margin types in RTB

RTB is beneficial not only to advertisers and publishers but also to ad exchange owners. They can generate and maximize revenue from media trading on their platforms by applying different margin types. 

A fixed margin is a specific percentage added to the request’s bid floor. Adaptive margin implies automatic calculation of the margin set according to the recent activity. As for the margin range, you define both minimum and maximum margins on your own. Then, the system checks the trading history and applies the most suitable margin from the specified range.

Pitfalls in ad exchange management to avoid

Here are several mistakes that you should avoid.

Sticking to a fixed margin

Even if a fixed margin seems the most effective and brings good results, consider experimenting with the adaptive and range options to check how this can help you drive revenue. 

Setting too low or too high margins

When your margin is low, this can help you generate a higher number of deals. However, if it is too low, your income can be affected. And if the percentage is too high, the number of deals may decrease. 

If you need to specify an exact percentage for a fixed margin or a range, start small and experiment with higher percentages. 

Setting the same margin for all the SSP and DSP partners

When you need to set your margin manually, avoid assigning the same percentage for each of your SSP and DSP partners. For instance, for those DSPs that bid with high prices, you may want to set up a higher percentage. Experiment with different percentages to see how this can help you drive income.

Not measuring the results

Continuously analyze RTB data to detect weaknesses and opportunities. This way, you will enhance your strategy.

RTB challenges and risks

The RTB meaning in marketing implies multiple benefits. However, there are also certain challenges that you should be aware of. 

Ad fraud and invalid traffic

RTB ecosystems are actively used by fraudsters, and fraudulent techniques evolve continuously. To protect your budget and ensure precise performance measurement, you need to utilize fraud detection and protection tools, set up filtering, and continuously monitor your campaigns.

Brand safety concerns

Yes, demand-side platforms usually offer features that help you keep your brand safe. However, in open auction environments, ads may still appear within inappropriate contexts. That is why you may want to combine real-time bidding campaigns with private marketplaces or direct deals. 

Transparency and fee complexity

The RTB environment involves numerous participants and intermediaries, which can make it challenging for you to understand where your budget actually goes. Adopt the supply path optimization practices to maximize transparency.

Latency and technical complexity

RTB auctions must be completed in milliseconds – work with DSPs and technology partners that use optimized bidding infrastructure and global data centers. 

To address technical complexity, select the right DSP – it should be equipped with a variety of optimization tools. Besides, monitor the performance continuously and test your campaigns regularly.

Examples of RTB in marketing

Let’s review a couple of examples to provide you with a deeper understanding of the RTB acronym in marketing. For instance, RTB is often used in mobile advertising – marketers bid on ad inventory in the mobile web and in-app environments to deliver highly targeted ads to their audiences. Device type and operating system are among the key targeting settings to consider here.

Besides, campaigns are often launched to reach users via CTV (connected TV) devices – ads are delivered during streaming content and tend to have a high engagement rate.

Advertisers also create such marketing campaigns to purchase video inventory across a variety of platforms. In general, RTB enables marketers to buy ad space in diverse formats and environments, which makes it a universal advertising approach.

How much does real-time bidding cost?

RTB usually operates on a CPM (cost per mille) model – marketers pay per thousand impressions. In this case, the price varies from several cents to a couple of dollars per 1,000 impressions. 

Demand-side platforms have different pricing structures on their own; however, the price also depends on such factors as ad placements, target audience, competition among marketers, and others. 

Therefore, there is no universal answer to the question “How much does RTB cost?” – each case is individual. When choosing a DSP, advertisers should prefer a solution that has features for bid optimization. This will help reach advertising goals without overspending. 

Attekmi’s approach to bidding

Managing an ad exchange is the opportunity to generate income from media trading; however, building such an RTB platform from scratch is not a must. In-house development or outsourcing (learn more about outsourced ad operations here) usually takes a lot of time and investment. Instead, you can benefit from ready-to-use or white-label solutions.

With Attekmi, you can start earning on media trading in the shortest possible time. And this is not the only benefit:

• Real-time bidding is on the list of our options.

• The platforms support fixed, range, and adaptive margins, so you are free to make a choice according to your needs.

• Multiple options for DSP and SSP integrations, including cross-integration bidding like VAST to RTB.

• When connecting DSP and SSP partners to your ad exchange, you can set up endpoints and specify the traffic types and ad formats they can bid on or deliver, margin, etc.

• Accurate targeting to match demand and supply effectively.

• Desktop, in-app, mobile web, and CTV traffic types are available.

• Ad formats include banner, video, audio, native, pop-up, and CTV ads. Basically, this selection meets the needs of any digital advertiser.

• Solid anti-fraud protection to prevent fraudulent traffic and ensure a safe ecosystem within your platform.

• Numerous traffic filtering and management options to optimize the performance of your ad exchange.

• Real-time monitoring and analytics.

• Secure data processing and privacy compliance.

• Regular updates to keep your platform competitive.

Using Attekmi solutions is the way to maximize your revenue potential without diving into a time-consuming and complex development and maintenance process. 

For example, Mobupps reached a 371% ROI growth within 6 months, while the increase in profit reached 207%. Apart from providing the company with an effective platform, Attekmi’s team has also developed a couple of individual features to ensure the solution meets all the requirements.

Does Attekmi seem like a perfect choice to you? Then get in touch with us and get a free consultation!

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