What Is OpenRTB?

How Does OpenRTB Work?

To understand OpenRTB, it’s important to first understand the fundamentals of real-time bidding (RTB) in mobile advertising. RTB is a way to buy and sell ad impressions in real-time auctions. App advertisers bid on impressions, and the highest bidder then wins the placement to serve their ad in a publisher’s app. 

OpenRTB is the protocol that enables these RTB transactions to take place in a transparent, standardized manner. In the app ecosystem, publishers connect to supply-side platforms (SSPs) to sell their ad spaces to advertisers, who connect to demand-side platforms (DSPs) in order to buy these spaces. 

These SSPs and DSPs communicate through OpenRTB and in doing so provide information in JSON about the ad impression they’re buying or selling. This information is essential for buyers to make a targeting and pricing decision – and bid on the ad space.

This information includes: publisher information; distribution channel and its content (app or website); ad format (native, banner, audio, video) and size; geolocation; device type and its user; regulatory constraints regarding data privacy, GDPR, COPPA; and the type of auction.

This is how open real-time bidding works:

1. The SSP or exchange sends a bid request, impression object, and sometimes additional data on impression context
2. The DSP makes a decision to bid on the impression
3. The DSP replies with a bid response or a no bid response
4. The ad exchange sends requests to the bidders telling them whether they’ve won or lost the auction.

Since OpenRTB’s industry-wide adoption in 2012, the IAB Tech Lab has published a detailed technical protocol for multiple OpenRTB versions. Most bidders support OpenRTB 2.5. This is considered the standard version.

Why Is OpenRTB Important?

With real-time bidding gaining more traction, OpenRTB offers several benefits for publishers and advertisers: 

• The entire process of real-time bidding is more consistent and efficient. Especially, in an industry with multiple ad networks and ad technologies.

• There’s a simplified connection between sellers (publishers, ad exchanges, ad networks, SSPs) and buyers (ad networks, bidders, DSPs) of ad inventory.

• SSPs and DSPs can implement multiple integrations faster and cheaper due to fewer development costs. This allows for internal business innovation at a deeper level.

• With insights into bidding losses and wins, ad inventory buyers can optimize their campaigns continuously based on the data shared through OpenRTB – from publisher, device, geolocation, etc.

• Due to its widespread adoption, OpenRTB gives buyers and sellers more flexibility when choosing to work with a new partner

• With information about the publisher, buyers can carry out brand safety measures. Blocking certain apps and traffic sources ensures their ads don’t appear in unsuitable apps.

Conclusion

OpenRTB is driving growth in the real-time bidding landscape. This is because it helps both publishers and demand sources communicate and trade ad inventory in a transparent and standardized way. 

It is through this open and standardized transfer of information that the entire process of real-time bidding becomes more efficient for publishers and buyers of ad space. Buyers in particular can use the data communicated through OpenRTB to optimize their campaigns continuously using the best-performing ad formats and publishers and targeting the highest-quality users.

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