Visiting any website these days might surround you with ads of your interest. The idea of how it happens might confuse you, but this is done through Programmatic Advertising. This is a term that you might have come across, and here’s everything you need to know about it!
What is Programmatic Advertising?
Programmatic advertising uses automated technology and algorithms for ad displays. Programmatic advertising is a quick and efficient way to reach the right audience. It takes the following into consideration:
- Audience.
- Bidding strategy.
- Budget.
- Creative and assets.
- Placements.
Before this came into being, ads were sold manually, thus making the advertising inefficient. Now, the ad is displayed only to its target audience.
How it Works: a few keywords
DSP
Demand-side Platform (DSP) is a platform that uses a database to evaluate the ad and its effective location on the internet.
An advertiser may contact their programmatic ad agency. The agency uses the DSP to automate the process of buying the ad that meets the firm’s goals.
SSP
When a person (the target audience) visits a website, the website sends an ad request to the Supply-side Platform (SSP). The DSP keeps the advertising data for the advertiser. The SSP keeps the advertising data for the publisher. The SSP connects with the DSP, and an auction takes place.
DMP
For the DSP to ensure that they reach the right audience, they use the Data Management Platform (DMP). The DMP manages the audience data. It takes into account, factors such as location, demographics, online activity and so forth.
It collects, manages, analyses and activates such data. It maintains user profiles that fuel the algorithm into displaying the target ads.
Ad Exchange
The Ad Exchange is where the DSP and SSP come together for ads to be bought and sold. It creates efficiency between the advertiser and the publisher. The publishers and advertisers connect and agree on a price to display the ad
This is done through real-time auctions that take place while a visitor is loading a website (typically 100 milliseconds).
RTB
When a visitor enters a website, a request is sent to an ad exchange with necessary information such as visitor data. The data is matched with available advertising and a Real-Time Bidding (RTB) takes place.
This leads the most efficient ad to be displayed on screen and reach its target audience.
Benefits of Programmatic Advertising
Before programmatic ad buying, digital ads were bought and sold manually. The process was thus ineffective and expensive. Programmatic advertising provide a cost-effective replacement for advertising.
These ads are less affected by ad blockers. Moreover, it creates a process that can optimize ads for a better success rate.
Publishers and advertisers are ideally connected in just 100 milliseconds.
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Until then, Happy Advertising!
