Real-time bidding (RTB)

Real-time bidding (RTB) is a way of buying and selling advertising inventory on a per-impression basis, through an instantaneous programmatic auction similar to financial markets.

How an auction runs. A typical transaction begins when a user visits a website. That triggers a bid request, which can include data such as the page being loaded, the user's location, browsing history and demographic information. The request goes from the publisher to an ad exchange, which passes it to multiple advertisers who submit bids automatically. The impression goes to the highest bidder, and their ad is served on the page.

Who does the bidding. Advertisers set maximum bids and budgets for a campaign, and the bidding then happens autonomously. Demand-side platforms (DSPs) determine the value of an individual impression in real time — in less than 100 milliseconds — based on what is known about a user's history. On the sell side, large publishers use supply-side platforms (SSPs) to manage advertising yield.

The OpenRTB standard. IAB Tech Lab's Real-Time Bidding Project, formerly known as the OpenRTB Consortium, was assembled in November 2010 by technology leaders from the supply and demand sides to develop an open API specification for the automated trading of digital media.

Privacy. RTB requires collecting, accumulating and passing on data about users and their activities — both to run the bidding and to profile users to "enrich" bid requests. This has led to privacy concerns and attention from data-protection authorities.