[3] RTB is promoted as being more effective than static auctions for both advertisers and publishers in terms of advertising inventory sold, though the results vary by execution and local conditions. RTB replaced the traditional model.
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However, in header bidding, publishers can put an impression up for auction across multiple ad exchanges simultaneously. Rather than moving through the buyers one at a time through a single ad exchange, header bidding enables all advertisers to bid simultaneously at the highest priority in the server. Whoever offers the highest bid upfront wins the auction.
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Payment Processed: The advertiser pays the agreed bid price through the DSP. The SSP then collects the payment, deducts its fee, and remits the remainder to the publisher.
When taking a closer look at digital advertising features, the CTV environment emerges as a lucrative channel that works on RTB principle.
Simplifying media buying: RTB eliminates the need to contact individual publishers, so advertisers don’t need to engage in long back-and-forth negotiations before purchasing digital ad space.
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This enables advertisers to bid in real-time for the opportunity to show an ad to a specific user, based on their demographic or behavioral profile, maximizing the relevance and efficiency of ad placements.
RTB auction is similar to the functioning of financial markets and their exchanges, except that ad impressions are being traded instead of stocks or fixed income securities.
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For publishers: RTB increases revenue and fill rates by opening inventory to a wider variety of buyers in a competitive auction. Finally, publishers gain visibility of who is buying which inventory and can leverage this knowledge to charge more for their premium placements.
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