Navigating The Modern Ad Serving Stack, Part 4: Open Auction (RTB)

In order to maximize the reach of data-driven, audience-based campaigns –- and, simultaneously, to do so in a completely automated manner — advertisers need to leverage the open auction of the public real-time bidding (RTB) marketplace.

According to estimates from eMarketer, ad spending via public or open RTB auction will surpass $8 billion in 2015, representing roughly 77 percent of all RTB-based digital display ad spending.

At the heart of the RTB marketplace is the second-price auction. In a second-price auction, the highest bidder only pays $0.01 more than the second-highest bidder.

In most cases, publishers partner with a supply-side platform (SSP) that enables them to expose their inventory to the RTB marketplace. They do so, rather than connect directly to a DSP, because SSPs connect to numerous partners that could potentially purchase this inventory. This increases the likelihood that a given impression will be filled, presumably netting more for the advertiser than going direct to the demand providers.
The way publishers typically structure this is by adding the SSP to their primary ad server, but at the bottom of the “waterfall” (i.e., at the lowest priority), so that only unsold inventory makes its way there.

 http://marketingland.com/navigating-modern-ad-serving-stack-part-4-open-auction-rtb-134905