What is actually Real-time bidding?
Real-time bidding is the solution for an effective trade. The automated nature of it gives immediate results in meeting the supply with the demand. More than often the marketers refer to it as a modern stock market where the highest price wins the advertisers inventory. The greatest benefits emerge from the transparency, price control and a shorten path to the end user.
How does it work?
Real-time bidding is automated, algorithm-driven trading that allows for quick buying of ad impressions according to pre - set parameters. Once the sellers or the advertisers set their ad impressions bid price, target groups or else relevant and have their inventory available on the market, the publishers can actually bid on it. Most important of all is that advertisements reach targeted audience according location, user history, text context in real time. Buying and selling of ad space is individually according to the bids, and all simultaneously in real time. In the milliseconds a browser is loaded or a mobile app started, information about certain web behavior of its end user is passed to an ad exchange server, which determines what is more relevant to be shown to this particular user. So the most appropriate advertisement that won the highest bid is visualized and an ad impression created near instantly.
Advertisers use demand-side platforms to help them decide which ad impressions to purchase and how much to bid on them based on the mentioned parameters or user behavior. On the other side publishers use supply-side platforms to enable them to control the minimum prices at which their inventory is sold.
Real time bidding enables buying and selling ad impressions simultaneously in an effective and transparent manner. Thus programmatic or in other words automated buying and selling allows much more efficiency, so no doubt it is the future.