Key Takeaways

• OpenRTB is the communication standard that enables real-time bidding in programmatic advertising

• Created by IAB Tech Lab, it standardizes how ad exchanges, SSPs, and DSPs communicate

• Currently, most platforms use OpenRTB 2.6, while version 3.0 exists but hasn't seen widespread adoption

• The protocol defines everything from bid requests and responses to auction mechanics and ad specifications

Ever wondered how millions of ad impressions get traded in miliseconds across the programmatic ecosystem? There's a behind-the-scenes protocol making it all possible that most people never think about. Let's break down what OpenRTB actually is and why it matters.

The Backbone of Programmatic: What Is OpenRTB?

OpenRTB (Open Real-Time Bidding) is basically the common language that makes programmatic advertising work. It's a technical standard developed by the IAB Tech Lab that defines how different platforms talk to each other when buying and selling ads in real-time auctions.

Think of it like a universal translator between publishers and advertisers. Without this standard, every ad tech company would be speaking their own languages, making it impossible to conduct business efficiently.

How OpenRTB Actually Works

When you visit a website that sells its ad space programmatically, here's what happens in those microseconds before you see an ad:

1. The publisher's ad server sends a bid request through their SSP (Supply-Side Platform)

2. This bid request contains specs about the ad space available and some (anonymized) user data

3. Multiple DSPs (Demand-Side Platforms) receive this bid request via OpenRTB

4. DSPs analyze the opportunity and decide if and how much to bid

5. They send bid responses back through the protocol

6. The highest bidder wins, and their ad gets displaid

This entire process takes less than 100 milliseconds usually. Fast, rite?

What makes OpenRTB special is that it standardizes all the technical details — from how to structure the bid request JSON format to what information should be included about the user's device.

The Evolution of OpenRTB

The protocol wasn't always as robust as it is today. It's gone through multiple versions since its introduction:

• OpenRTB 1.0: The original specification, launched in 2010

• OpenRTB 2.x Series: Brought major improvements for mobile, video, and native advertising

• OpenRTB 2.6: The most widely implemented version today, with enhancements for CTV and audio ads

• OpenRTB 3.0: Released in 2018 but hasn't seen widespread adoption yet

According to a recent announcement from IAB Tech Lab, they're changing how they update the protocol to be more responsive to the rapidly evolving adtech ecosystem.

Technical Components of OpenRTB

For the slightly more technical readers, OpenRTB consists of several layers:

1. Transport Layer

The base communication happens over HTTP/HTTPS, with POST requests for bid requests (to handle larger payloads) and either POST or GET for win notices.

2. Bid Request Format

The bid request contains several key objects:

• Impression object (details about the ad spot)

• Site or app object (where the ad will appear)

• Device object (information about the user's device)

• User object (anonymized user data)

{
  "id": "1234567890",
  "imp": [
    {
      "id": "1",
      "banner": {
        "w": 300,
        "h": 250
      }
    }
  ],
  "site": {
    "id": "site123",
    "domain": "example.com"
  }
}

3. Bid Response Format

The response includes:

• Bid ID

• Price

• Creative payload or URL

• Win notification URL

Why Publishers and Advertisers Should Care

If you're a publisher, understanding OpenRTB helps you:

• Better configure your SSP for maximum revenue

• Troubleshoot issues when demand seems low

• Make informed decisions about which programmatic partners to work with

For advertisers and agencies, it lets you:

• Know what data is available for targeting decisions

• Understand why certain impressions might not be available to you

• Optimize your bidding strategies based on the information you receive

Limitations and Challenges

OpenRTB isn't perfect. Some common issues include:

• Inconsistent implementation: Even though it's a standard, different platforms interpret certain fields differently

• Privacy challenges: As privacy regulations evolve, the user data that can be passed through OpenRTB changes

• Adoption hurdles: While OpenRTB 3.0 introduced improved security features, the industry has been slow to adopt it because of implementation costs

As BidSwitch explains, "OpenRTB 3.0 took on other programmatic business challenges... but the required changes were too significant for most platforms to justify the transition."

The Future of OpenRTB

The protocol continues to evolve, with recent updates focusing on:

1. Better support for Connected TV and audio ads

2. Enhanced fraud prevention measures

3. More granular content categorization

4. Improved creative specifications

According to Admixer, "the current version of OpenRTB protocol is utterly outdated, and lowers the effectiveness of programmatic trading." This is why IAB Tech Lab continues to push for updates and improvements.

Bottom Line

OpenRTB might sound like just another technical acronym, but it's one of the most important standards in digital advertising. Without it, the programmatic ecosystem as we know it simply couldn't function at scale.

For publishers looking to maximize their ad revenue and advertisers wanting to optimize their programmatic buying, understanding the basics of how OpenRTB works isn't just technical trivia — it's essential knowledge for making smarter business decisions.