At the intersection of brands and publishers lies a very important player in the online media ecosystem: programmatic advertising platforms. You see, publishers of websites have prime virtual real estate they want to sell, and brands have ads they want to place. Programmatic ad platforms help each side get what they want; they’re the arbiter of a mutually beneficial relationship. While this sounds relatively straightforward, it’s anything but.
Back in olden times (the 90s), advertising online was sold like any other medium, with real salespeople manually reaching out to brands and manually making deals. Did I mention that they did this manually? The advent of programmatic advertising platforms changed all of this. Now, marketers and advertisers manage their campaigns with the help of AI-powered algorithms, allowing ads to be placed in fractions of a second thanks to real-time bidding (RTB). All of this can quickly become complicated.
While advertising on the web may be a tangled...web, you don’t need a PhD to figure it out. And, if you understand the process of programmatic ad buying a bit better, you’ll also better understand how to find success in this arena.
RTB: The Internet Auction
RTB may be just one part of the programmatic advertising landscape, but it is a key mechanism that makes programmatic buying possible. Before this technology was invented, advertisers would place ads on sites they believed matched their target audience. Since they manually bought these spots, that meant that - much like billboards along the highway - the ad would be shown to everyone who visited the site whether they fit their target or not.
RTB automates the process of ad buying. Each time a user visits a web page, real-time auctions facilitate a bidding process in which multiple ads vie for an ad placement. One ad will win the spot, but for a different user, another ad may win the auction and be shown. Because this all happens on a case-by-case basis, programmatic advertising platforms allow for more accurate and quicker targeting.
RTB is not the only form of programmatic advertising happening on the internet today. It is far and away the most popular way to handle the process of buying and selling, but it doesn’t work for every circumstance. For instance, programmatic direct uses a fixed-price agreement rather than an auction and is usually used for large format ads that take over the entire screen.
There’s also private exchange buying, which sort of employs an RTB approach. These platforms are invite-only and include a select number of publishers. While there is an auction to bid on available inventory, the terms are pre-negotiated so it’s not exactly a real-time bidding situation.
Alphabet Soup
For the bidding process to run smoothly, several other key components are required. This is where the process and ecosystem can become the most confusing. You have your demand side platforms (DSPs), supply side platforms (SSPs) and data management platforms (DMPs), and each plays a critical role.
Ad exchanges are platforms that automate media buying and selling online. They’re like online marketplaces that anyone can buy from. Advertisers and publishers usually use DSPs or SSPs to interact with multiple ad exchanges and keep their activities centralized.
Now, the DSP. These platforms allow advertisers to automatically buy ad inventory across a range of publisher websites. In each instance, ads are targeted at users according to an advertiser’s specifications like their geographic location or the kind of content they’re searching for. Each time an auction occurs on an ad exchange, DSPs provide the information on which bidders qualify for a certain website or audience.
SSPs are programmatic advertising platforms that cater to the needs of publishers. They connect with an ad exchange and tell it what kind of inventory publishers have available. Inventory could be on their website, mobile app, video and so on. In the same way that DSPs centralize ad buying and tracking, SSPs also centralize the selling process. They connect to multiple ad exchanges to maximize the number of buyers and get the best price possible. Whereas DSPs try to buy inventory at the cheapest price, SSPs try to sell it for the highest price.
DMPs are used to collect, organize and store information. Unless it’s used in combination with a DSP, these platforms really can’t do that much, but in combination, they give you much access to user data and expand your programmatic targeting options. DSPs handle the actual ad buying process, but DMPs store the data used to drive these buying decisions.
The Benefits of Utilizing Programmatic Advertising Platforms
Using third-party advertising platforms such as DSPs or SSPs bring several benefits you won’t have in other ad buying and selling environments.
For advertisers, it gives you more control. Instead of dealing with a single publisher, DSPs give you access to multiple ad exchanges and multiple display options. This means more available ad inventory which equals more impressions for your ads. You also have more control over where, when and to whom your ads are delivered. The nature of the programmatic ecosystem allows you to target your ads using different strategies including geotargeting, behavioral targeting, dayparting and targeting by device.
If you’re a publisher, programmatic advertising platforms ensure not only that their inventory is sold for what it’s worth, but that it’s sold to the types of advertisers they want. You have the ability to choose the type of buyers and ads you will allow alongside your media content, and you can choose what types of advertising should be prohibited. For publishers, your control over the process even extends to the location of the placement. You choose where on the page ads will appear, allowing you to optimize engagement for users.
The Ward Group: Seasoned Digital Media Buyers
Digital advertising has become an incredibly popular and resilient channel for brands and publishers alike. That is due in no small part to the ease and control programmatic advertising platforms have created for both parties. The overwhelming majority of dollars spent on online ads are transacted programmatically. Once you have a firm grasp of how the entire ecosystem works, you’ll be able to direct your budgets more responsibly and target users more effectively.
With 35 years of experience under our belts, the media stewards at The Ward Group have had a front row seat for the evolution of programmatic advertising. While this process is definitely better than the in-person transactions that used to occur, virtual ad exchanges and real-time auctions can still be mind-boggling. For assistance optimizing your audience targeting and ad budgets, contact The Ward Group! Our media stewards are ready to help you manage buying and selling across the web.