RTB: Real Time Bidding Example


This post will illustrate how a RTB system would work, and why it has been embraced to strongly by the industry. Lets walk through the process of a user landing on a page till has page has fully rendered to understand whats going on behind the scenes. This example will assume their are two advertisers, Coke, Best Buy and Zara; DoubleClick will be the online AD agency, and CNN is the publisher.

1- User┬ávisits CNN’s landing page which contains an AD space managed by DoubleClick.

2- Information about the user is retrieved by CNN from the users IP. Bear in mind that since CNN gave Double Click access to that empty AD space on CNN’s website, now Double Click can also retrieve the users info. They can also access cookies available in the users browser, one of those cookies is Double Clicks own cookie that was placed on advertisers website to help them track users from their advertisers website, to their publishers website.

  1. Country
  2. City
  3. Age
  4. Cookie info (For example Zara)
    1. Before the user landed on CNN’s page, he visited the Zara website and added something to their shopping cart. Zara is also working with Double Click and hence use their cookie to keep note that this user added something to their shopping cart in Zara.

4- Online AD agency uses a SSP (Supply Side Platform) to give the publisher the ability to select the highest bidder with their accepted criteria. For ex.

  1. CNN accept only clothing and electronics advertisements.
  2. Wants the highest bidder on their impression

5- Online AD agency also give the advertisers a DSP (Demand Side Platform) to allow advertisers to bid on those impressions

  1. Zara
    1. Will pay 5$ for US users who have added something to their cart
    2. Will pay 2$ for US users who have nothing in their cart
  2. Coke
    1. Will pay 7$ for anyone in the US
  3. Best Buy
    1. Will pay 6$ for US people who added something to their cart.
    2. Will pay 1$ for US people who have nothing in their cart

bottom_right36- Real Time Bidding comes into effect.

  1. The user is located in the US
  2. He has an item in his shopping cart on Zara, hence Zara bids 5$
  3. He has no items in his shopping cart on Best Buy, Best Buy bids 1$
  4. Coke bids 7$

7- The winner in this case is Zara

  1. Although Coke’s bid is higher than Zara, but CNN only accepts advertisements from the electronics and clothing industry.

8- Double Click prepares Zara’s AD creative and sends it to their AD space on CNN’s website.

9- Double Click will charge Zara 5$ and give CNN a portion of this Revenue.

Thanks for reading the post.

Michael Ghattas

Tech guy deeply interested in startups, growth, AI and just anything exciting. Currently involved with MTL New Tech and Wavo.me. Love travelling and exploring new cultures. In my spare time I like to read, write, code, and just hang out with friends. I actively trade the stock market and will be talking about my trades in the blog.