RTB: fast, secret auctions with your data.

3 min read

Georgia Iacovou

29 Mar 2019

RTB stands for real-time bidding. If you like browsing - which I’m sure you do, you browsed to this article, after all - you have been subject to RTB many, many times. Just think back to the last time you had this thought: ‘wow I really want to visit that site I like called bestsite.biz’. A highly relatable thought. If bestsite.biz contains ads, BOOM: that’s real-time bidding.

So the great thing about RTB is that you don’t even know it’s happening. Oh no wait that’s the terrible thing about it. Yeah, sorry it’s bad. Here’s what happens when you visit bestsite.biz while the page loads:

For the sake of this article let’s say bestsite.biz is a busy street full of empty billboards. Why is the street so busy? Well besides you, the user, you’ve got:

  1. Advertisers: brands who want to sell things to you
  2. The publisher: in this case that would be bestsite.biz. Let’s say it’s a really annoying bloke with a megaphone standing in the middle of the road called Daryl.
  3. Advertising exchanges: the middle-man between the advertisers and the publisher (Daryl).

Okay so you’re walking along the street and Daryl sees you. He obnoxiously megaphones these words for everyone else to hear, “okay we’ve got a user who’s recently gone vegan, only reads non-fiction, and really likes superhero movies. Show me what you got. And hurry up, my billboards are embarrassingly blank, god.”

So now the advertising exchanges on the street have an impression of who you are. They take note of all the billboard space that’s available and start running auctions based on your data.

Let’s hone in on one auction to get a clear picture of what’s going on. An exchange says, “come on guys this billboard is huge and visible from every corner of the street. You must have SOMETHING. Veganpower.veg - I’m looking at you. Or what about you, random superhero merchandise site that no one has heard of?”

Everyone talks over each other. The superhero merchandise site meekly raises a hand, “I mean I’ve got some batman mugs but-“

Veganpower.veg interrupts with, “Aha! I’ve got a vegan recipe book called ‘what superman would eat if he was vegan’”.

“Good lord, that really checks all the boxes,” says the exchange, “you win. Pay up.”

And there you have it. The advertiser wins the auction, sends the advert over to bestsite.biz, and the advertising exchange fills the billboard. Daryl continues to shout facts about you through his megaphone, and the cycle continues until all billboards are filled. This all happens within the 200 milliseconds it takes to load a webpage. It’s very fast, and it’s very accurate.

You may be asking how someone like Daryl could know so much about you. Think of it this way: there are thousands and thousands of Daryls out there and they all share the same interest: yep, it’s you. There are many ways for a Daryl to track your behaviour online. Using cookies is one of them, and there’s an article about that here.

RTB is something made possible by the IAB (the Interactive Advertising Bureau). The IAB are the ones who set the standards. They basically turn around to the world of advertising and say “Hey, we figured out this great way of doing adverts online. You should all do it this way if you want to be the best at online adverts.”

Naturally, all those media outlets and advertising platforms that we know and love (or fear and hate?) fall in line and that’s how RTB has become so prominent. Remember, it’s a chance for everyone in the chain to make money, just look at this whiteboard:

real time bidding illustrated with advertiser and publisher serving targeted ads

There has recently been some controversy surrounding RTB. What we’re getting down to here is that the IAB have done nothing to ensure that anyone using RTB couldn’t share data about say, your religious or political beliefs. You know, the kinds of things that could be used to infer how you might vote in elections. Interesting.

the author

Georgia Iacovou

Content Writer, Metomic