What does the abbreviation RTB mean?
RTB (Real-Time Bidding), or real-time advertising, is a modern method of buying and selling advertising inventory through programmatic auctions that resemble the mechanisms of financial markets. This process allows advertisers and publishers to trade ads effectively, with everything happening in real time.
In every area of marketing, whether it is traditional forms or the digital environment, there are two basic parties – publishers who offer advertising space and advertisers who seek the best deal for ad placement. Publishers sell their inventory, whether it is ad positions on websites, broadcast time on television or radio. On the other hand, advertisers try to acquire these ad spaces at a price that suits them.
Goals of RTB
Real-time advertising (RTB) was developed to optimize ad purchasing, eliminate human errors, and increase the efficiency of the entire process. RTB offers significant advantages compared to traditional methods, where the price and terms of the campaign are negotiated manually between agencies and publishers. Through machine learning algorithms and cloud software, this process is automated, reducing administrative burdens and speeding up media buying.
Mechanism
The RTB auction process occurs the moment a user opens a webpage. The ad displayed on the page becomes the subject of an auction among various advertisers. Each of them submits a bid to show their ad to this user. The bid that offers the highest price wins. This process takes place in a fully automated environment and lasts less than 100 milliseconds.
Costs
The cost of an RTB campaign depends on various factors, such as the scope and type of websites where the ad is displayed. Advertisers set a maximum bid price (for example, €1 per click) and also a budget for the entire advertising campaign.
There are four main ways to calculate the price of advertising within RTB:
- CPM (cost per 1000 impressions): The advertiser pays for every thousand impressions or clicks on the ad.
- CPC (cost per click): This model means that the advertiser pays for each click on the ad.
- CPL (cost per lead): This is a model where the advertiser pays for acquiring a contact from a potential customer, for example, by filling out a registration form.
- CPA (cost per action): The advertiser pays for a specific action, such as a click, form submission, or purchase.
Real-time advertising (RTB) brings to digital marketing speed, efficiency, and accuracy. Thanks to this technology, advertisers can flexibly manage their campaigns and optimize spending in real time.