Since launching in June 2012, MediaMath’s, New Marketing Institute (NMI) has educated hundreds of digital marketing professionals across the country. Developed in tandem with the Direct Marketing Association and Grovo.com, NMI’s goal is to empower, educate and engage those working in this ever-evolving, dynamic digital space. Therefore, we have varied course topics and certification classes that we teach from the basics of “Networks and Exchanges,” to “Industry Best Practices.”
Before each course begins, I will typically poll our attendees about their top questions, which leads to courses better tailored to their needs. It is also an interesting way to gauge what digital marketers grapple with most today. For the Intro to Digital Media – Level One certification course, the most frequently asked question that I receive from professionals before they attend the class is, “what is real-time bidding (RTB) and how does it work?”
Real-time bidding is similar to buying and selling on a stock market. In this case, ad buyers purchase impressions from sellers through an exchange.
There are several parties involved in real-time bidding: the website visitor, a publisher’s website, a publisher’s supply-side platform (or ad exchange), and an advertiser’s and/or buyer’s demand-side platform (DSP).
When a visitor reaches a website that sells ad space using real-time bidding, the publisher’s website notifies the publisher’s supply-side platform (SSP) or ad exchange that an ad will load on that page, creating an impression opportunity.
The SSP or ad exchange in turn solicits bids for that impression opportunity from several buyers using DSPs to place an ad. The DSPs gather a variety of information, including information about the website and anonymous data about the website visitor, in order to decide how attractive this impression opportunity is to the buyer, that is, how well it will achieve the buyer’s ultimate objectives (like getting the visitor to click or to buy their product). These decisions are calculated through powerful algorithms processing tremendous amounts of data in real time in order to determine the right price to bid for each impression on behalf of each buyer.
The DSPs submit the bids of the various buyers back to the SSP or ad exchange, which then determines the winning bid. The winning DSP directs an ad back through the SSP or ad exchange to the publisher’s website, and the website visitor will then see the ad.