What is Real-Time Bidding (RTB)?

Real-time bidding (RTB) is the auction mechanism in which each individual ad impression is offered to buyers as it becomes available, buyers submit bids within milliseconds, and the winning bid's ad is shown.

Also known as: RTB, Real-time auction

How it works

Every time a page, app screen or video ad break loads, there is an ad opportunity, called an impression. With real-time bidding, that single impression is put up for auction at that moment.

The sequence runs roughly like this:

  1. A user opens a page or app, or a video reaches an ad break.
  2. The seller's systems, often a supply-side platform (SSP) or ad exchange, create a bid request. It describes the impression: the site or app, the ad size or format, the device, general location and any deal information.
  3. The bid request goes to many demand-side platforms (DSPs) at once.
  4. Each DSP checks the request against its advertisers' campaigns and decides whether to bid and how much.
  5. The exchange picks the winning bid according to the auction rules and any floor price.
  6. The winning ad is returned and shown to the user.

All of this happens in a fraction of a second, which is why the word "real-time" matters. Systems from different companies can only cooperate at that speed because they share a common message format, most often OpenRTB.

Open auction and private auctions

RTB is used in the open auction, where any eligible buyer can bid, and in private marketplaces, where only invited buyers can bid on deal inventory. The auction mechanism is the same; access rules differ.

Why it matters

RTB lets a buyer decide what each impression is worth to them, based on context and data, instead of paying one price for a large block of inventory. For sellers, it creates competition for every impression, which can raise prices when demand is strong.

RTB also has limits worth understanding. Auctions favour inventory that is clearly described and easy to evaluate quickly. Many intermediaries can bid on or resell the same impression, which creates duplicate paths and makes transparency harder. Floors, auction type and the mix of demand partners all shape what a seller earns. That is why many publishers combine RTB with deals rather than relying on the open auction alone.

Example

Illustrative example. A user opens an article on a generic cycling blog. The blog's header bidding setup and SSP send bid requests to several DSPs. Three buyers bid: a sports apparel campaign, a travel campaign and a general retail campaign. The sports apparel bid is highest and above the floor, so its ad loads with the article. The next page view starts a new auction with different results.

IncrementX perspective

Real-time bidding is one of the channels IncrementX uses to connect represented inventory with demand. Through the Demand Marketplace, represented inventory can reach DSPs, trading desks and programmatic buyers through open and private auctions as well as fixed deals. IncrementX's AI-assisted monetization work looks at signals such as bid behaviour, demand response and floor performance to support pricing decisions in these auctions.