How does real-time bidding work?
Real-time bidding (RTB) works as an instant auction for each ad impression. When a person opens a page or app, the publisher's platform sends a bid request describing the ad slot and context to many buyers. Their DSPs evaluate it, return bids within roughly 100 to 300 milliseconds, the highest valid bid wins, and the winning ad loads.
Step by step: the page's ad code triggers an ad request; the publisher's SSP or ad exchange packages details (site or app, ad size, device type, approximate location, available identifiers and consent signals) into an OpenRTB Bid request; DSPs check it against their campaigns, value it and send a bid response with a price and creative; the exchange runs the auction, applies floor prices and picks a winner; and the winning creative is served, often with measurement tags.
Most exchanges now run first-price auctions, so buyers use bid shading to avoid overpaying. Everything must finish before the auction timeout, which is why latency matters so much. The stream of bid requests, the bidstream, also leaks data, which is why privacy regulators scrutinize RTB.