An advertiser wants to reach “women aged 25-34 in San Francisco who have browsed running shoes in the last 7 days.” When a bid request arrives for a user, the DSP must evaluate whether this user matches the targeting criteria in under 5ms. The ad targeting pipeline is the system that makes this lookup fast. Audience Segments as Bit Arrays Each targeting criterion defines an audience segment: a set of user IDs.

An advertiser sets a $1,000 daily budget. Without pacing, the DSP would spend the entire budget in the first hour of the day, when bid prices happen to be low, and the ad would show to nobody for the remaining 23 hours. Budget pacing distributes ad spend evenly across the day (or according to a target schedule) so the advertiser gets coverage throughout the day rather than a burst. The Pacing Problem Pacing is a rate control problem with a stochastic input.

When you load a web page, an auction happens in under 100 milliseconds to decide which ad you see. A publisher sends a bid request to an ad exchange. The exchange fans it out to dozens of demand-side platforms (DSPs). Each DSP decides whether to bid and at what price. The exchange picks the winner. All of this completes before the page finishes loading. Real-time bidding (RTB) is one of the most latency-sensitive distributed systems in production.