Understanding the Functionality of OpenRTB
Advertising today has become highly targeted. And let’s not forget that it is personalized as well. Of course, this change can be chalked up to several different technologies. However, the open real-time bidding system has made the most waves. The auction platform, this system enables advertisers to place bids on ad impressions. Its impact in the sector has been sizeable. So, suffice it to say that it has transformed how digital advertising is purchased and sold. The result? Greater efficiency and effectiveness.
To help you better understand how open real-time bidding works, I will walk you through its operations process in this blog.
OpenRTB: An Overview
There are many benefits for both advertisers and publishers of an RTB system. Let us take advertisers, for example, to gain a more efficient way to reach their target audience. It also helps them optimize their advertising budget. As for publishers, RTB enables them to monetize their ad inventory better. This is done by selling impressions to the highest bidders. This can result in increased revenue and higher returns on their digital assets. The system also has its own set of issues and challenges. The rapid pace of the auction process can make it difficult for advertisers to stay current on bidding trends. It can also render optimization of their campaigns a challenge. The RTB ecosystem’s complexity can also make it difficult for stakeholders to understand how the system works. Hence, their ability to make sound decisions takes a hit.
How the OpenRTB System Works: A Quick Glimpse
● Ad request: The process starts when a user goes to a website or app. The publisher’s ad server submits an ad request to an ad exchange. This request includes a wealth of information. What kind of info, you ask? Well, it includes the user’s:
○ IP address
○ Device type
○ Operating system
○ Browser
○ Page content
○ Website or app category
○ Ad placement on the page
○ Ad slot size
○ Position on the page
○ Any targeting criteria specified by the publisher
● Auction: When the ad exchange receives an ad request, it routes it to various demand-side platforms (DSPs). These DSPs examine the request and employ sophisticated algorithms to calculate the value of the impression. This process involves data enrichment. In this process, the DSPs supplement the ad request with additional information, such as:
○ User’s demographics
○ Browsing history
○ Purchasing behavior
The process also includes real-time bidding: DSPs submit bids to the ad exchange herein. This bid submitted by the DSP in question indicates the highest price they are willing to pay for an impression. It may also be interesting to note that DSPs can optimize ad spending using various bidding strategies. These strategies could be cost per thousand impressions, a.k.a. CPM, or cost per click, a.k.a. CPC, among others.
● Winner: The ad exchange picks out the highest bidder as the process moves towards the finish line. After the selection, the ad exchange notifies the winning DSP. The winning DSP, in turn, connects to the advertiser’s ad server. To what end, you ask? To retrieve the ad creative that will be displayed, of course.
● Ad display: It’s time for the final step in this process. After the winning DSP is notified, the ad server sends the ad creative to the publisher’s ad server. The publisher’s ad server then places the ad creative in the appropriate ad slot on the website or app. The user then views the advertisement. With this, the RTB process is completed.
Final Words
To conclude, OpenRTB has revolutionized digital advertising by enabling more targeted, efficient, and effective ad placements. Advertisers benefit from optimized ad spend and better reach, while publishers see increased revenue through real-time auctions. Despite its complexity and challenges, it offers a powerful buying and selling ad impressions system. Understanding its process, from ad request to display, allows stakeholders to navigate this dynamic ecosystem more effectively and capitalize on its potential. If open real time bidding still seems like a complex endeavor, I recommend that you hire an expert ASAP.
