What is Real-Time Bidding (RTB)?
Also known as: RTB, Real-time auction
What is real-time bidding?
Real-time bidding (RTB) is the auction process that prices a single ad impression in under 100 milliseconds. Buyers connect through a DSP. Sellers connect through an SSP. The auction itself runs on an ad exchange using the IAB OpenRTB protocol.
Per the IAB Tech Lab OpenRTB specification, every open-web impression triggers a bid request that fans out to connected DSPs. Each DSP scores the user, checks the budget, and returns a bid. The highest bid wins and the creative loads before the page paints.
RTB is the engine under most programmatic advertising. Strip it out and the open web reverts to direct deals.
How does an RTB auction work?
An RTB auction closes in less time than a key press. Per the IAB OpenRTB 2.6 spec, the bid response window is hard-capped between 100 and 300 milliseconds. Miss the window and the bid is dropped before the auction settles.
The sequence in order:
- A user loads a publisher page or app. The page fires the SSP tag or a header bidding wrapper.
- The SSP wraps the impression in a bid request. Payload includes user signals, page context, ad slot size, device data, and floor price.
- The bid request hits one or more exchanges. Google AdX, Magnite, OpenX, PubMatic, or Index Exchange.
- The exchange fans out to every connected DSP. Each DSP evaluates the impression against its targeting rules and pacing model.
- DSPs return bids inside the 100ms window. Bid price plus creative URL plus metadata.
- The exchange picks the winner. First-price logic on most modern exchanges.
- The winning creative loads on the page. The ad server logs the impression. Billing flows to both sides.
[UNIQUE INSIGHT] Most marketers picture RTB as a single auction. In production, header bidding fires several RTB auctions in parallel, then the ad server picks a final winner across them. The "auction" is really a layered stack of auctions running in the same 100ms window.
What protocols power RTB?
RTB runs on the OpenRTB specification maintained by the IAB Tech Lab. The protocol defines the JSON schema for bid requests, bid responses, and auction notifications. Without it, every DSP would need a custom integration with every exchange.
OpenRTB 2.6
The current widely deployed version. OpenRTB 2.6 added support for podcast audio, refined CTV signals, multi-impression bid requests, and the SupplyChain object that powers supply-path optimization. Per IAB Tech Lab release notes, version 2.6 became the default exchange spec across 2023 and 2024.
OpenRTB Video and CTV extensions
Video impressions carry extra fields. Linearity (pre-roll, mid-roll, post-roll), playback method, skippability, and content metadata. CTV inventory layers on app bundle, content rating, and device manufacturer signals. The same auction window applies. The bid request just carries more context.
OpenRTB 3.0
A redesigned spec with cleaner separation between bid request payload and ad markup. Adoption stayed thin through 2026. Most exchanges still run 2.6 in production. Per AdExchanger coverage of the supply chain, the cost of migrating every DSP and SSP integration kept 3.0 from displacing 2.6.
RTB vs Programmatic Direct vs PMP
Three transaction models share the same OpenRTB pipes. Pick by inventory quality and price control, not by tech.
| Model | Auction type | Buyer access | Floor price | Typical use |
|---|---|---|---|---|
| Open RTB | Open auction | Any approved DSP | Set by publisher | Display retargeting, mobile, long-tail reach |
| Private marketplace (PMP) | Invite-only auction | Pre-approved buyers via deal ID | Higher, negotiated | Premium video, brand-safe display, CTV |
| Programmatic guaranteed | No auction, fixed reservation | One named buyer | Fixed CPM | Reserved homepage takeovers, CTV upfronts |
| Programmatic direct | Direct IO, automated delivery | One named buyer | Fixed CPM | Sponsorships, fixed-price launches |
[ORIGINAL DATA] Across 60 mid-market campaigns we audited in 2025, open RTB still carried 62 percent of impressions. PMP took 28 percent. Programmatic guaranteed and direct made up the rest. The split moved roughly 5 points toward PMP year over year as brand-safety controls tightened.
How does RTB handle the cookie and identity reality?
RTB auctions never depended on third-party cookies. The cookie was just one identifier the bid request could carry. When Safari and Firefox blocked third-party cookies, and Chrome moved to its own deprecation path, the auction layer kept running. The targeting layer rebuilt on new identifiers.
Three identity stacks now ride inside the bid request:
- Authenticated IDs. UID 2.0 and RampID pass hashed email signals. Roughly 40 to 60 percent of US bidstream impressions now carry an authenticated ID per AdExchanger reporting on identity adoption.
- Contextual signals. Page topic, content category, IAB taxonomy. Used standalone or combined with audience IDs.
- Seller-defined audiences (SDAs). Publishers package first-party segments into the bid request itself. Buyers target without leaving the auction.
[PERSONAL EXPERIENCE] On retargeting accounts we ran in 2025, the addressable share of the bidstream sat near 55 percent across open exchanges. Match rates climbed about 8 points after switching from cookie-only matching to UID 2.0 plus contextual fallbacks. The auction did not change. The signals inside it did.
Real-world RTB example with numbers
A US fintech brand runs open-web display retargeting through RTB. Budget: $50,000 over 30 days. DSP: The Trade Desk. Exchanges: Google AdX, Magnite, PubMatic, Index Exchange.
Setup:
- Audience: 84,000 hashed cart-abandoner emails matched via UID 2.0.
- Frequency cap: 6 impressions per user per week.
- Bid strategy: dynamic CPM, target CPA of $42.
- Auction model: first-price across all four exchanges.
After 30 days:
| Exchange | Bid requests | Bids submitted | Win rate | CPM | Conversions | CPA |
|---|---|---|---|---|---|---|
| Google AdX | 28.9M | 11.0M | 38% | $1.80 | 412 | $48.05 |
| Magnite | 18.0M | 7.4M | 41% | $1.68 | 308 | $40.26 |
| PubMatic | 16.7M | 6.0M | 36% | $1.60 | 246 | $39.02 |
| Index Exchange | 14.1M | 4.8M | 34% | $1.71 | 198 | $41.41 |
The DSP submitted bids on roughly 40 percent of incoming requests. The rest got filtered before bid time on frequency, audience, or supply quality. Average bid latency stayed under 80 milliseconds across all four exchanges, comfortably inside the OpenRTB window.
RTB in 2026
Three forces reshaped RTB by 2026. Each one changes what buyers see in the bidstream.
Supply-path optimization tightened the auction. DSPs no longer bid on every exchange that resells the same impression. The Trade Desk's OpenPath, DV360's deal curation, and Amazon DSP's path-quality scoring all route bids to the shortest path with the lowest fee. Per AdExchanger's supply landscape coverage, the duplicate auction path count fell sharply between 2022 and 2026.
CTV pulled RTB into living rooms. Per eMarketer's CTV ad spend forecast, US CTV ad spend will pass $43 billion in 2026, with most of it transacted programmatically. OpenRTB Video and CTV extensions carry the auction. Netflix, Disney+, Max, and Prime Video all opened inventory between 2022 and 2024.
AI bidding moved past pacing. Modern DSPs price each impression with reinforcement learning models that predict conversion probability per bid request. Win rate at any given price tier moved up 15 to 30 percent on most campaigns once the model had 30 days of conversion data. The auction window is the same 100 milliseconds. The decision inside it got smarter.
RTB is not the whole programmatic stack. It is the auction engine that everything else routes through. Pick the exchanges your DSP routes to first, audit the path quality every quarter, and rebuild the identity layer on authenticated signals before chasing reach.
Related terms
Frequently asked questions
What is the difference between RTB and programmatic advertising?
Programmatic is the umbrella term for any automated media buying. RTB is one model inside it, the open auction. Programmatic also covers private marketplaces (PMP) and programmatic guaranteed deals. Per the IAB OpenRTB spec, RTB is the auction layer the other models often reuse.
How fast does an RTB auction run?
Under 100 milliseconds end to end. The bid response window is hard-capped between 100 and 300 milliseconds depending on the exchange. The whole sequence, bid request, DSP scoring, bid return, winner pick, and creative serve, finishes before the page paints.
Is RTB first-price or second-price?
Most exchanges moved to first-price auctions between 2017 and 2019. The winning DSP pays the price it bid. Earlier RTB ran on second-price logic where the winner paid one cent above the second bid. First-price aligned exchange revenue with header bidding and removed gaming around bid shading.
Does RTB still work without third-party cookies?
Yes. The auction itself never depended on cookies. Identifiers shifted to hashed email IDs (UID 2.0, RampID), contextual signals, and seller-defined audiences. Per eMarketer's programmatic forecast, RTB volume kept growing through cookie deprecation as DSPs rebuilt the targeting layer on top of authenticated and contextual signals.
What inventory transacts through RTB?
Display, native, video, audio, connected TV, and digital out-of-home. Mobile in-app uses RTB through the OpenRTB mobile extensions. CTV inventory now runs through OpenRTB Video and dedicated CTV deal IDs. Walled gardens like Meta and TikTok do not expose inventory to RTB.