The Developer’s Guide to Programmatic: Part 3 – How RTB Works

By Masami Hirata, EVP of Global Marketing
Thursday, November 3, 2016 / 1 min read

Header RTB Programmatic

In Part 3 of our Developer’s Guide to Programmatic series we’ll explain what RTB is in reference to programmatic advertising and walk you through how it works. (Read Part 1 and Part 2 if you’d like to get an understanding of the programmatic value chain and what programmatic advertising is.)

When the word “programmatic” comes up in mobile advertising deals, typically people are talking about the process of real-time bidding (or RTB). Although programmatic technology extends far beyond just RTB, allowing multiple advertisers to bid on inventory in “real-time” has been the biggest driver of growth in ad tech over the past five years. And that’s brought positive impact to the growth of mobile app monetization.

In the world of digital advertising, RTB is the buying and selling of ad impressions done in an instant auction. This is facilitated usually by a mobile SSP (supply side platform) or an ad exchange. At any given moment, multiple advertisers can bid on a single impression of a publisher or developer’s inventory. The winning ad is then shown to the user in the app.

RTB Programmatic Diagram

Take, for example, the moment in a mobile game app where the player watches an ad in-between the game levels. At that moment, the mobile SSP runs an auction with all of the advertisers interested to grab the attention of that audience (in this case, the mobile game player.) The advertisers make their bid, in a split-second the highest bidder is chosen, finally the ad gets “served” and shown to the player.

Both publishers and advertisers can set parameters for RTB – minimum prices and maximum bids, for example – as well as prioritize specific deals and inventory. This split-second process is illustrated in the infographic – albeit simplified.

We hope this series has started to help you understand the basics of programmatic advertising so you can further explore different ways of selling your inventory to advertisers. Next week in Part 4 of our series, we’ll get into the benefits of programmatic and why it could be a big win for developers. Stay tuned! In the meantime, if you have any questions about Fyber, feel free to contact our experts here.