Real-Time-Bidding is an auction setting where ad impressions are bought and sold. Once an advertiser bid wins an auction, his Ad is instantaneously shown on the publishers’ website. There are two sides to any ad and media buying interaction, we have publishers and advertisers, who follow the rules of supply and demand in their negotiations and trades. Publishers offer their websites. (ad locations on their pages)
How does Real Time Bidding work?The actual process of how RTB platforms work is pretty straightforward in principal.
- An advertiser visit our platform and set a bid.
- The advertiser generates a BID REQUEST that contains specific information relating to the user. This will consist of their type of demographic, information relating to their location, their type of browser/ device and into which category they fall.
- With all this information to hand, Traffic Factory passes this Bid Request to its list of advertisers.
- A Bidding Auction begins in real-time for the ad impression to be served on the publishers’ webpage.
- The winning bid has their impression served in 1st place on the publisher’s website.
Bid price, winning price, and frequency cap.
The Technical Side to our RTB modelIt would be fair to assume that the principal of ad position allocation is served on a maximum bid principal meaning that the highest bidder gets position 1, the 2nd highest bidder gets position 2 and so on. But… this is not always technically the case! An example of this would be:
- Bids are collected for a specific ad spot
- The highest bidder gets the 1st position, the 2nd highest bidder is allocated the 2nd position, etc…
- Campaign budget limits
- Dayparting options
- Frequency cap even though their bid is the highest, certain selected options can have an effect on their position.
Bid price: the amount in USD that an advertiser pay for his final bid.
Winning price: the amount in USD of the winner bid.
Frequency cap: length of your unique user session.