Introduction
Programmatic Advertising has completely transformed how digital ads are bought and sold. Instead of manual negotiations, ads are now purchased in milliseconds through automated systems powered by Artificial Intelligence and Real-Time Bidding (RTB).
But what exactly happens when you visit a website and see an ad? Let's break it down.
What is Programmatic Advertising?
Programmatic Advertising is the automated buying and selling of digital ad space using software platforms (DSPs & SSPs), data, and AI algorithms — with little to no human involvement in real-time.
Key Benefits:
- Automated media buying
- Real-time auction
- Precise audience targeting
- Optimized budget spending
Real-Time Bidding (RTB): How Ads Appear in Milliseconds
When a user visits a website, here's what happens behind the scenes:
RTB Process Flow:
User visits Publisher's website Publisher's site sends an ad request to SSP (Supply Side Platform) SSP forwards the request to an Ad Exchange Multiple DSPs (Demand Side Platforms) receive the request Each DSP evaluates: - User's interests (audience targeting) - Device, location, context - Advertiser's bid strategy DSP submits bids in real-time (auction happens) Highest bidder wins. Ad Exchange sends winning creative back. Ad is displayed to the user – all in ~120 milliseconds
Visual Flowchart of RTB Process
[ User ] │ ▼ [ Publisher's Website ] │ ▼ [ SSP ] │ ▼ [ Ad Exchange ] │ ▼ [ DSP 1 ] ———► Bid submitted [ DSP 2 ] ———► Bid submitted [ DSP 3 ] ———► Bid submitted │ ▼ [ Winning Ad Delivered to User ]
Why is RTB Important?
- Efficient and instant media buying
- Every impression is auctioned to the best bidder
- Marketers save time & reach the right user at the right moment
- Publishers maximize revenue
Summary Cheat Sheet
| Term | Meaning |
|---|---|
| RTB | Real-Time Bidding, the auction process |
| DSP | Platform where advertisers buy ad space |
| SSP | Platform where publishers sell ad space |
| Ad Exchange | Auction house connecting DSPs and SSPs |
| Impressions | Times an ad is shown |