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.
N.B: From the generating of the Bid request to the serving of the ad impression, this entire RTB process takes place within a 100 milliseconds!!
This process is repeated for every available ad space on the publisher’s webpage; now that’s an efficient advertising Traffic Factory platform.
Bear in mind that it doesn’t have to be the same ad, just at the same location, and this is exactly what publishers are selling as their inventory (ad impressions).
When it comes to RTB marketing, there are several key values that both media buyers and sellers need to understand:
Bid price, winning price, and frequency cap.
The Technical Side to our RTB model
It 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…
Now, if the highest bidder has certain parameters such as:
Campaign budget limits
Frequency cap even though their bid is the highest, certain selected options can have an effect on their position.
They may have the highest bid but their budget limit will not allow them to bid that amount so the next highest valid bid receives the better position.
Their dayparting and frequency cap options may also vary and hinder their “high” bid so the next highest “valid” bid will get the 1st position.
Even though their bid is the highest, certain selected options can have an effect on their position.
At the end of all this process your YAP (Yesterday Average Position) gives your approximate position.
Every time a user sees an ad, that instance is considered as one impression. For example, when they see a top banner ad on the first page they visit, that is “a first impression for that particular ad placement”. Obviously, for the second page, it would be a second impression, and so on.
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.