How RTB advertising works: from a millisecond auction to a world without cookies

A 100-millisecond auction, step by step

Picture an exchange where millions of items are auctioned every second, each one unique and each one gone the moment you blink. That item is one display of one ad to one person on one page. When you open a website, all of this happens in the background, well inside a tenth of a second:

• 1. You load the page. The publisher's system registers that it has ad space free.
• 2. The SSP sends a bid request. It attaches anonymised signals to the page: device type, approximate location, browser, content context and any available identifiers.
• 3. The ad exchange broadcasts the demand. Within an instant the request reaches dozens of buying platforms (DSPs).
• 4. DSPs value the user and bid. Each platform calculates how valuable that person is to its advertiser, checks the budget and sends a bid per thousand impressions.
• 5. The auction picks a winner. Highest bid takes it.
• 6. The winning creative loads. And the whole thing is logged for measurement and optimisation.

According to the IAB Tech Lab it all runs on a shared protocol called OpenRTB, the common language SSPs, exchanges and DSPs use to talk to each other regardless of who built them. And it repeats billions of times a day. Once you realise that in that tenth of a second an auction more complex than most property transactions takes place, advertising starts to feel almost moving.

Who is who in the ecosystem

There are as many acronyms here as in an army, but the principles are simple. Stick with one metaphor: a stock exchange.

• Publisher: the owner of the space. A website, an app, a magazine, connected TV. Wants to sell that space for as much as possible.
• SSP (supply-side platform): the broker on the selling side. Offers the publisher's space into the auction and maximises their yield.
• Ad exchange: the exchange itself. Where supply meets demand and the auction happens.
• DSP (demand-side platform): the broker on the buying side. The tool an advertiser or agency uses to buy impressions across thousands of sites from one place.
• DMP / CDP: the data warehouse. Manages the audiences and signals a DSP uses to decide who to bid on and how much.
• Advertiser and agency: the one who pays, and the one who pulls the levers for them.

In Czechia two buying platforms dominate today: the local Adform and Google Display & Video 360. Seznam, meanwhile, keeps its own world to one side, with its own inventory and its own rules.

Programmatic is not the same as RTB

This confuses even people who have been in the industry for years. Programmatic buying is automated ad buying in general. RTB is only its noisiest part, the open auction. Alongside it there are quieter and more exclusive ways to buy:

• Open auction (open RTB): a marketplace for everyone. The greatest reach, the least control over where exactly you end up.
• Private marketplace (PMP): an invitation auction. Selected publishers, better placements, an agreement sealed with a deal ID.
• Preferred deal: a fixed price and first refusal on the space, but with no volume guarantee.
• Programmatic guaranteed: reserved volume at a fixed price, no auction. Automated direct buying, the certainty of the old days, just without the fax.

Treat RTB as a bargain bin for picking up leftover space cheaply and you lose twice. Once on quality, once on the brand. The open auction is a tool, not a dumping ground.

First-price versus second-price (and why it all flipped)

For years the auction ran on second-price logic: the highest bidder won but paid only a fraction more than the runner-up. An elegant theory a Nobel laureate would appreciate. Then came header bidding, a technique where the publisher runs a simultaneous auction in the page header so more platforms push on the price at once. That broke the old mechanics and around 2017 to 2019 the market flipped to first-price: you bid, you win, you pay exactly what you offered.

It sounds like a detail for accountants, but it is a fundamental shift in transparency. A first-price auction exposes far better the hidden fees individual platforms take along the way. And in ad tech, transparency is perhaps what matters most of all.

What you are actually paying for: CPM and the ad-tech tax

The currency of RTB is CPM, the price per thousand impressions. The catch is how much gets bitten out of it before it reaches the publisher. The SSP takes its cut, the exchange its own, the DSP its own, the data its own. This sum of fees is called the ad-tech tax and by various analyses it swallows anywhere from thirty to fifty percent of the budget before you pay for a single actual impression.

There is a defence: supply path optimization, where you deliberately buy through the shortest and cleanest chain, plus the ads.txt and sellers.json files that help verify the seller of the space really is who they claim to be. Dull as stocktaking. Saves a fortune.

Targeting and data: why first-party wins

The auction is only plumbing. Value is set by what you know about a person. Data splits roughly like this: first-party is your own (from the website, CRM, loyalty programme, e-shop), third-party you bought from somebody else, and contextual targeting bets not on the person but on the content of the page they are reading. Add lookalike audiences, people similar to your best customers.

Once the ground started shifting under third-party cookies, first-party data became the new gold. Whoever has it in order can target even in a world without cookies. Whoever relied only on purchased audiences was left out in the cold.

A world without third-party cookies (and what replaces them)

The third-party cookie, the workhorse of targeted web advertising for twenty years, is on its way out. Google postponed and reversed its end in Chrome several times, but the direction is clear: nobody sensible wants to rely on it any more. So the market is backing several horses at once:

• Privacy Sandbox from Google: interfaces such as Topics (interests from the browser without cross-site tracking) and Protected Audience (remarketing inside the browser itself).
• Login identifiers: UID2, ID5, RampID, built on an email given with consent.
• The return of context: good old content-based targeting, just smarter.
• Clean rooms: protected environments where two parties can compare data without handing it to each other.

In Europe all of this is additionally governed by GDPR and ePrivacy: without user consent there is no targeting, and the consent banner is not decoration, it is the law. Consent management is therefore not an annoying detail but the foundation the legality of the whole campaign rests on.

Bad habits worth understanding

Where money flows in milliseconds, scavengers gather. A few terms everyone releasing budget into an auction should know: brand safety (so your ad does not appear beside content that would harm the brand), ad fraud (bots pretending to be people), viewability (whether anyone could have seen the ad at all) and MFA sites (made-for-advertising, pages built purely to harvest ad money with not a shred of value for a reader). Against this stand verification firms like IAS or DoubleVerify. It is not paranoia, it is hygiene.

Long past banners alone: CTV, DOOH and audio

Anyone picturing RTB as just a flashing banner has slept through the era. Programmatic now buys connected TV (advertising in streaming services on smart TVs), programmatic DOOH (digital billboards changing content by time and context) and online audio. The IAB Tech Lab is therefore steering its protocol exactly this way, toward proper support for CTV, live streams and cross-environment measurement. The 100-millisecond auction is simply moving from the computer into the living room and out onto the street.

RTB in Czechia

RTB arrived in Czechia in 2012 and took a few years to shed the label of cheap leftover space. Large Czech publishers joined forces in the Czech Publisher Exchange (CPEx) to sell their inventory programmatically together and avoid needlessly driving the price down. Seznam.cz, as usual, goes its own way with its own inventory and rules. On the buying side the already mentioned Adform and Google DV360 dominate. The market is smaller than the American one, which makes it all the truer that relationships and a clean supply path matter more than the size of the budget.

When RTB makes sense (and when it is an expensive toy)

RTB is superb for scale, precise targeting, testing and retargeting. It gives you reach you would never achieve through direct buys, and data you can learn from. It is not a magic wand, though. The old computing rule applies to the auction: put nonsense in and you get nonsense back faster and in greater volume. Without organised first-party data, a clean supply path and honest measurement, RTB is just an elegant way to spend a budget in a tenth of a second. With them, it is one of the most powerful levers in marketing.

A small glossary

• RTB: real-time bidding, the auction of a single impression in real time.
• DSP: demand-side platform, the advertiser's buying tool.
• SSP: supply-side platform, the publisher's selling tool.
• Ad exchange: the exchange where the auction takes place.
• OpenRTB: the IAB standard protocol, the common language of the whole ecosystem.
• CPM: cost per thousand impressions.
• PMP and deal ID: the private marketplace and its sealed agreement.
• Header bidding: a simultaneous auction in the page header.
• SPO: supply path optimization, shortening and cleaning the buying path.
• CTV / DOOH: connected TV and digital out-of-home.

FAQ

Sources: IAB Tech Lab, OpenRTB Specification (v2.6, 2025 roadmap) · IAB Tech Lab, ads.txt & sellers.json · Google Privacy Sandbox (Topics, Protected Audience) · Digiday and AdExchanger (first-price, header bidding, ad-tech tax) · Lotame and Publift (PMP, deal ID) · Médiář, A guide to programmatic online advertising · ROI digital and MarketingPPC (RTB in Czechia, CPEx, Adform, DV360).