Featured Image Source: Photo by Alessio Zaccaria on Unsplash
When users look at an advertisement on any online platform, there are very few actions that they might take. They may ignore it right away or may open it and then change their mind altogether or even open it and buy the product, or even just browse through all the information there is and yet do nothing at all. But what they clearly miss on, is a plethora of actions which display that advertisement on their screen. These actions in technical terms, sum up what we know as ‘Advertisement Technology’ or Adtech. Adtech is basically a set of tools and services used by agencies and companies today to buy and sell ads.
Now as the conversation turns towards adtech, it is important to establish that while adtech refers to a range of software-based components, it is under the ambit of Programmatic, that these components operate. Programmatic is basically about using Artificial Intelligence and algorithms with various software-based services to buy and sell ads in real-time.
Real-Time Bidding
Now, Programmatic is of 4 kinds-
1.Programmatic Direct
-It is a one-to-one transaction process.
-Both parties agree on a specific inventory space based on a fixed Cost Per Mille (CPM-Cost per thousand impressions).
(a.) Spot Buying / Preferred Deals
-Refers to deals between a publisher and a specific buyer for a fixed-price CPM.
-Focusing more on the audience.
-Exclusive access to the publisher’s inventory before it is offered in Private and Open marketplaces.
(b.) Automated Guaranteed
– Automation of the traditional direct deals.
-Negotiated between buyers and sellers via a technology platform.
– Inventory offered is usually premium.
-Pricing guaranteed and duration fixed.
-Buyers usually apply advanced targeting methods via Data Management Platforms (DMP).
2.Private Exchange Buying (PMP)
-A Method to sell inventory to pre-selected advertisers.
-Accessible only via invites.
-Premium inventory is sold to bidders already approved by the publisher.
3. Automated Performance
-Similar to Automated Guaranteed. But these deals guarantee overall campaign performance rather than impressions.
4. Real-Time Bidding
– Buying and selling of ads in an open marketplace auction.
-Usually, remnant inventory is sold to advertisers at generally lower costs.
-This happens in the time taken by a webpage to load up on the user’s screen.
Programmatic is available in 4 channels-
1. Display
2. Mobile
3. Video
4. Social
The Process
Programmatic uses various components to function efficiently.
Demand-Side Platforms, Supply-Side Platforms, Data Management Platforms, Ad Servers, Ad Exchange, Trading Desks, are all software-based elements forming a chain in the buying and selling of advertisements online.
Ad Networks- These platforms connect specific buyers to sellers, to sell selected inventory from websites or apps that fall under that specific ad network.
Ad Exchange- Ad Exchanges connect advertisers with various Ad Networks to make deals happen. They communicate with both parties via DSP’s and SSP’s. It is the platform where sellers meet buyers, negotiate prices based on certain information and seller inventory or display ads respectively. Most ad exchanges operate via RTB.
DMP-Data Management Platforms
DMP’s are platforms that collect user data across various channels from publishers, sort and segment them and based on this data, they help the DSP to decide whether to bid on a certain placement request or not.
1. When a user opens up a webpage, between the time it is opened and the page is visible, (100 milliseconds) a request is sent to an onion tor omgomg ad exchange connected to that website, containing the website and user information via the SSP (SUPPLY SIDE PLATFORM). It helps the publisher sell its inventory on thread exchange. The SSP can connect with as many Ad Exchanges to maximize the sale of its client’s inventory.
2. The Ad Exchange shares this information with the available advertisers on their DSP’s (Demand Side Platforms). This platform helps advertisers display ads via the ad exchange. When the exchange receives the request from the SSP, it asks the DSP whether it has ads fitting the placement request or not, following which the DSP analyses the request to decide whether to buy or not to buy.
3. The DSP values the impression based on the data received via the ad exchange and also via the DMP. Based on its analysis, it submits it’s bid to the exchange.
4. The exchange picks up the winning bid and on whichever price based model the auction was held, shares the winning bid with the SSP.
5. The SSP then serves the winning bid on the webpage to the consumer.
Since most exchanges function in an RTB method, the above-mentioned process also explains how an RTB is conducted. Programmatic advertising is slowly taking over other advertisement buying and selling methods due to its efficiency, convenience, and its outreach. And though complex, it’s functioning is clearly mind-boggling.
