Advertising auction

Also called: ad auction or real time bidding(rtb)

An ad auction allows various advertisers to bid for advertising space on Web sites. The cost of placing banners and text ads is determined based on supply and demand. This principle is widely used for advertising in search engines, among other things.

Advertisers can use bids to indicate how much they are willing to pay for impressions or clicks. The process of assigning ad space to the highest bidder is fully automatic and is a continuous process.

In many advertising programs with an auction model, advertisers do not necessarily pay the bid price. The actual cost also depends on the value of the second-highest bid. The outcome of the auction may result in a lower CPC or CPM.

With some programs, such as Google Ads, the CTR and quality of the landing page also play into determining the auction winner and the cost charged.

For advertisers, the advantage of an auction is that they can advertise through a network with a wide reach at the lowest possible cost, based on what the market is willing to pay.

For website publishers, the advantage is that they can outsource the sale of advertising space while maximizing revenue.