What is RTB Full Guide to Real-Time Bidding in Programmatic Ads

Real-time bidding” became a catch-all term. In contrast, Open RTB is more than just a buzzword. Instead, it is a game-changing protocol in converting digital advertising and increasing ad revenues for publishers.

And, by the time you finish reading this guide, the global programmatic advertising ecosystem will have conducted approximately 3 billion individual ad auctions. Where each one will have evaluated dozens of competing bids, selected a winner, and delivered a specific ad to a specific person on a specific device in real-time.  

You would probably be wondering how it happens. The straightforward answer is “Open RTB”, a technology that empowers the majority of digital advertising as it exists today. 

Now, imagine a situation where you are an advertiser who is coordinating with multiple ad exchanges, negotiating deals with buyers, and trying to get revenue from ads. And, if something goes wrong, it could all come crashing down. 

This guide explains everything about RTB, Open RTB, its ecosystem, how it works in programmatic, how to make the most of ads, and more.

What is Real Time Bidding?

Real-time bidding is a tactic where ad inventory is purchased and traded in a real-time auction in programmatic advertising. It typically happens on a per-impression basis. Now that new technologies have come out, publishers can automate and use real-time intelligence to do things that used to be very hard to do.

On the contrary, if the real-time bidding process weren’t automated, it would have been a lot of manual work and years of collecting data to get to effective transactions. 

Additionally, RTB allows advertisers to bid on each ad impression as it becomes available. Plus, it allows them to target only the specific users they care about at a price they are willing to pay, at the exact moment an opportunity arises, rather than purchasing a fixed block of space on a website in advance, similar to how it happens in the early years of digital advertising. 

Open RTB Meaning: What Makes It "Open"?

To get familiar with the Open RTB meaning, you first need to understand the problem it was designed to solve. In the early years of programmatic advertising, particularly between 2007 and 2010, every DSP or SSP used proprietary and inconsistent protocols to communicate with each other. 

Whereas, if a DSP wants to buy inventory from multiple SSPs, then they have to build and maintain a custom technical integration with each one. Now that was an expensive, time-consuming, and inefficient process, having a limited scale and a fragmented market. 

To deal with such inefficiencies, the Interactive Advertising Bureau (IAB) provides a solution by introducing an open-source communication protocol, aka Open RTB, that all DSPs and SSPs could adopt.

To put it simply, it is a language that allows every participant of the programmatic ecosystem to speak to every other participant, no matter which company has built their technology. 

RTB vs OpenRTB: Key Differentiating Factors

Now that you are familiar with what is real time bidding and Open RTB and how they evolve, let’s comprehend the key differences between them: 

As you can see in the table above, RTB is the auction mechanism where ad inventory is bought and sold. On the contrary, Open RTB in programmatic ads is a technical protocol or a standardized language that allows mechanisms to operate.  

Why OpenRTB is Useful For Publishers?

OpenRTB in itself acts like a translator who ensures that all the parties, including the publishers, advertisers, and ad exchanges, remain on the same page. This is just one benefit; the rest are listed below: 

• Maintain a Great Speed: Similar to RTB, OpenRTB also enables real-time transactions. This means, the moment any visitor lands on your website, your ad will be sold and displayed within no time. 
• Efficiency: Without OpenRTB, it will be hard for publishers to manage multiple demands in one go, as it would require dedicated engineering and operational resources. On the contrary, the standardized protocol of OpenRTB allows publishers to focus on content and audience development rather than technical integrations. As a result, it increases your chances of securing high prices for your ad space. 
• Take Control: OpenRTB gives publishers the ability to set and dynamically adjust floor prices, which is the minimum CPM they will accept for any impression, and who gets to bid. 
• Transparency: There will be no secret bidding going on. Publishers will remain transparent about the entire transaction process and allow you to know who’s buying at what price.

How Does OpenRTB Work?

OpenRTB operates through a series of real-time data exchanges between buyers and sellers. Although it sounds like a magical fix, you are probably wondering how it works. If so, here is how it works: 

• The Ad Request: Whenever a visitor lands on your website, the publisher’s ad server gets active and immediately sends an ad request to the SSP. This request includes all the necessary information, like user device, location, browser, page content, and user behavior signals. Finally, all these data points help buyers to understand the value of your ad space. 
• The Auction: Now your request will be sent to an ad exchange by the SSP. The ad exchange will then broadcast the request to multiple DSPs, whereas each DSP will analyze the user data, match it with adviser targeting criteria, and use algorithms to decide whether to bid or how much to bid. Next, each buyer bids for your ad space based on the amount they see in it. 

This entire auction happens in under 100 milliseconds, which is faster than a webpage loads.

• The Winner: Once all bids are received, the ad exchange compares them, and the highest bid wins the auction. But wait, it’s not always about the highest bid; factors like ad quality, relevance, or brand safety rules may also influence the final decision. 

Again, one more twist…

The buyer who wins only pays one cent more than the person who came in second. This is called the second-price auction model, which guarantees impartiality.

• The Ad Display: Finally, the winning ad is instantly sent back through the chain, which goes like DSP ? Ad Exchange ? SSP ? Publisher’s website/app. Hence, the winning ad will be instantly displayed on your website in real-time.

How to Get Started With OpenRTB?

By now, we are assuming that you are ready to step into the programmatic advertising world. You may be wondering where to begin. Here’s how you can start and learn how open RTB in programmatic advertising operates behind the scenes:

1. Select Your SSP: Your first move will be choosing an SSP, which is the gateway to the Open RTB ecosystem. Also, when selecting the know their demand partner breadth, floor price management, header bidding support, reporting, and brand safety controls. 

Furthermore, SSP is responsible for sending out ad requests and conducting a real-time auction. Magnite, PubMatic, OpenX, Index Exchange, and Xandr are some of the leading Indian publishers with unique strengths. 

2. Implement Rules: Next comes the technical implementation of Open RTB, which requires configuring the ad server and SSP integration correctly. Given that, here are the key elements to implement: 

• Ads.txt Implementation: The Authorized Digital Sellers (ads.txt) is a publicly accessible text file that publishers mainly use to host on their domain, declaring which SSPs and ad exchanges are authorized to sell their inventory. The only bummer without the ads.txt implementation is that your inventory will be vulnerable to domain spoofing and unauthorized reselling.

• Floor Price Configuration: Set minimum CPMs by format, audience segment, device type, and time of day.
• Supply Chain Transparency: Next comes implementing sellers.json to sell the inventory in the bid stream. And, when combined with ads.txt, it gives buyers complete supply chain transparency.
• Viewability and Brand Safety Standards: The last thing is to configure the ad slots in order to meet the IAB viewability standard, i.e., minimum 50% of pixels in view for 1 second for display, 2 seconds for video. 

3. Monitor and Optimize: Once the SSP is all set and rules are in place, it is time to monitor and optimize your rules based on your observations. The key metrics to monitor include fill rate, average CPM, bid density, viewability rate, IVT rate, and win rate by DSP. However, this is what separates publishers who extract maximum value from Open RTB from those who leave significant revenue untapped.

Top 2 OpenRTB Versions

Like Google’s updates to its algorithms to refine valuable content and rank high-authority sites, programmatic advertising has evolved with different versions for marketers. Each version is dedicated to enhancing the way real-time bidding operates.

The two most prominent versions are as follows:

• OpenRTB 3.0: It is the major upgrade designed to overhaul the programmatic advertising sphere by building trust and transparency. This version introduced Ads.cert for supply chain authentication, uses AdCOM for structural efficiency, and aimed to fix fragmentation issues in programmatic auctions. 

Therefore, the updates further aim to lower the ratio of ad fraud and create a dependable programmatic environment for every person involved. 

• OpenRTB 2.5 and 2.6: These versions are IAB Tech Lab standards, which enable fine-tuning, adding security in real bidding, and getting incremental refinements for better functionality. For example, 2.6 focuses heavily on Connected TV (CTV) improvements, and 2.5 supports header bidding + video. 

The overall goal of these versions is to make your life as a publisher easier and increase the profitability of your ad space.

How Adomantra Can Help You With OpenRTB Integration?

AdoPremium is a leading ad exchange solutions provider. Whether you’ve just entered the programmatic ecosystem or are an established media company that wants to generate more revenue from its inventory, we can adapt our solutions to your scale and sophistication level.

While generic programmatic platforms treat every publisher the same, you will probably be wondering what Adomantra can do that is exceptional. Find below:

• DSP Technology: We have direct access to premium demand partners.
• AI-Driven Audience Intelligence: With the intelligence of AI practices, we understand your audience better than anyone else.
• Deep Supply-Chain Expertise: We have 14+ years of expertise in programmatic advertising. 
• Customized Strategies: We do not work with a one-size-fits-all approach. Instead, we provide solutions that are built specifically for YOUR properties and audience.
• Rich Media Excellence: We go beyond standard banner ads by delivering highly engaging rich media formats across both image and video. For example, we can advertise creatives like expandable banners, carousels, and dynamic visuals.

Besides these, our expertise spans various digital solutions. SEO, web development, media planning & buying, content marketing, PPC advertising, ORM, etc. You name it, we have it!

Read More : What Is Programmatic Advertising

Conclusion

To end with, OpenRTB's meaning doesn’t just stick to technical standards. It is not your regular visible infrastructure. It remains invisible, but active behind the scenes, which makes modern digital advertising function at a planetary scale.

Open RTB has the potential to revolutionize the digital publishing industry by streamlining the digital advertising process and guaranteeing that the ad space is distributed efficiently.

Becoming proactive for the prevention of fraud, adhering to version updates, adjusting SSP rules, and taking user experience into account are the most effective methods to use this technology. Meanwhile, the most common mistakes to avoid are ignoring diverse ad formats, setting up inappropriate floor prices, and neglecting performance analysis. 

And if navigating all of this feels overwhelming, find Adomantra by your side, as we are experienced in building campaigns around it. At our core, we combine DSP technology, AI-driven audience intelligence, and deep supply-chain expertise, so that you can capitalize on your ads. 

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FAQs

Q1: What is real-time bidding, and how is it different from traditional ad buying?
A: RTB is an automated auction process where ads are bought and sold in milliseconds. On the other hand, traditional ad buying involves negotiations and the purchase of fixed blocks of ad space on specific websites in advance. 

Q2: What is the difference between programmatic and real-time bidding?
A: While advertisers aim to get the best ad space within your business’s budget, publishers get the highest bid. The main difference between the two is that RTB uses an auction model, whereas Programmatic does not.

Q3: What are the benefits of Open RTB in programmatic for both publishers and advertisers? 
A: With Open RTB, publishers can upgrade their ad revenue by presenting ads to various competing buyers. On the other hand, advertisers can enable viewership precision, pricing efficiency, real-time optimization, and ultimately scale.