What is RTB? How Does it Work?

If you’ve spent any amount of time in the marketing arena, then there’s no doubt that you’ve come across the phrase RTB, or real-time bidding. Simply put, RTB is one of the fastest-growing ways that advertising platforms are electing to handle transactions with their service.

However, just because you’ve heard of RTB doesn’t necessarily mean that someone’s taken the time to explain exactly what is RTB to you. To help fix that problem, we’ve written this article.

In it, you’ll learn everything you need to know about what RTB is and how your company can benefit from it.

What is RTB?

The RTB meaning is exactly what real-time bidding sounds like — a transaction strategy that advertisers use wherein bids are submitted in real-time for online ad space. That means that the value of the ad space is constantly changing. 

For instance, let’s consider search engine advertising. If the volume of searches for a particular keyword changes, then that means that the demand is going to fluctuate up and down. If it fluctuates down, then the bids for that particular piece of ad space on that keyword will be lower.

Consequently, the ad space will be sold at a lower rate.

On the flip side, if that keyword suddenly spikes because of a larger search trend, then you’re going to have bid at a premium in order for you to get that ad space.

Real-Time Bidding — Yes or No?

So now that you know what real-time bidding is, let’s figure out the pros and cons of RTB.

The obvious con of RTB is that you’re subject to significant price fluctuations in a matter of minutes. There’s no way for you to lock down a good price for a long time. Instead, you’re always going to be paying market price for the ad space.

The caveat to that, however, is a good thing for you. Because the market price is always fluctuating, that also means that you can’t get locked into a high rate for a long period of time either. Using the previous example of search engine advertising, if ad space on that keyword suddenly becomes less desirable then that means that you can bid less and pay less on that space.

The other benefit is that real-time bidding platforms leverage technology to help you submit bids automatically. You don’t have to hire someone to sit and watch the bidding prices. Instead, you can set a maximum and minimum price if you wish, and then let the software auto-bid on your behalf.

Leverage Programmatic Bidding for Your Business

Now that you know what is RTB and how to leverage the perks of RTB for your own company, all that’s left is for you to figure out what RTB advertising platforms you want to reach your customers on!

If you’re looking for more business advice, you’re in the right place. Be sure to take some time to browse around and check out the rest of the articles available to read on the website before you leave!