A Comprehensive Take on the Programmatic Ecosystem

The digital revolution has changed how marketers carry out campaigns. Now, advertisers have access to the technology ecosystem that makes it possible to buy targeted online ads. This concept is what defines programmatic advertising. The success of a marketing campaign depends on the ability to deliver the correct message to the right audience using the correct channel. A programmatic ecosystem allows marketers to accomplish this. In this piece, I will analyse some of the main players of a programmatic ecosystem: 

The Programmatic Ecosystem

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Ad Server

This web-based server is responsible for storing various elements of digital advertising, including static images, and various HTML5 files as well as video files. When a publisher needs advertising content like a banner ad posted on a mobile app, the ad server delivers it. Tracking impressions on advertising content, ad targeting and monitoring campaign performance are some of the other roles tasked to the ad servers.

Ad Network

The ad network is the player that collects audience data and then categorises it. An ad network can divide consumers according to location, demographics and online behaviour. Then, it sells this data to advertisers who have an easy time targeting audiences when they are segregated. 

Ad Exchange

Publishers need a platform to sell their ad space while networks, agencies and advertisers have to find the resources they need. An ad exchange is where these transactions happen. Think of it a neutral space where publishers can leverage the value of what they have, and advertisers can reach their audiences. The buyers use demand-side platforms to get into the ad exchange while the sellers (publishers) access it through supply-side platforms. 

Data Management Platform

The data on targeted audiences comes from various sources, and the data management platform is responsible for keeping it all in one place. The DMP manages cookies IDs, which makes it capable of segmenting audiences. Using the centralised data, the DMP signals the right audiences to target.

Agency Trading Desk

Programmatic advertising campaigns require tracking and management, which is the role assigned to the agency trading desk. If an advertiser wants to know how to get the most from real-time bidding, ATD can help. An ADT can manage campaigns across different ad networks and exchanges. 

Demand-side and Supply-side Platforms

Advertisers and publishers need platforms to plug into the ad exchanges for transactions. The demand-side platform enables buyers to purchase advertising inventory. For this reason, the platform is suitable for use by media houses, ad agencies, advertisers and personal brands. Advertisers can bid, budget or adjust targeting through the DSP interface. Buyers have access to an unlimited number of publishers. 

Sellers, on the other hand, have supply-side platforms, which are linked to various demand sources, including DSPs. This digital interface is designed to help publishers such as websites and mobile applications sell inventory, which is advertising space. Sellers use the SSP to control the type of content that audiences receive. By design, the interface gives the available ad space to the highest bidder. 

The Basics of Programmatic Buying

Real-time bidding is a significant part of the ecosystem, but it is not the only method that advertisers can employ to purchase inventory. 

A private marketplace is a digital platform where every advertiser has to be invited. The publisher already has specific buyers that it sells inventory to and, therefore, knows where the content will be used. Buyers transacting on the private marketplace have already undergone an approval process. Due to the direct relationship between the two parties, the ad exchange is not necessary here. The DSP links to the publisher’s inventory directly. 

Preferred deals are based on a one-to-one relationship between the publisher and the advertiser. The two parties agree on a fixed price before getting on their respective interfaces. It means that a particular buyer will get preference when shopping for inventory from that publisher. However, the ad space is not reserved. The buyer gets the first look, and if the advertiser fails to get the inventory, the seller can offer it through different bidding options. 

Real-time bidding (RTB) is also called open marketplace or open auction where bidding occurs in real time. The bidding occurs on the ad exchange. What happens is that the minute an impression is available for sale, the buyers‘ DSPs receive bid requests from the ad exchange. After a careful analysis, the DSPs send replies, which the seller’s SSP evaluates and picks the winner that receives the ad space. It takes approximately 100 milliseconds for this entire process.

Lastly is the programmatic direct method where the advertiser approaches the publisher directly to get the media inventory. The type of digital invention and price are all pre-arranged, which eliminates the need to participate in auctions on the ad exchange. With this alternative, the media inventory is reserved, which gives security to the seller. Advertisers benefit from premium content and transparent transactions with the publisher. 

The programmatic ecosystem consists of different components that play crucial roles in the system. However, DSPs and SSPs are the most critical. Any marketer who wants to capitalise on programmatic advertising must be well conversant with every facet in the ecosystem. Advertisers should all know the right tactic for buying digital inventory depending on the type of campaign.

Stop trying to keep up. Start getting ahead!

Stop trying to keep up. Start getting ahead!

Martech is a complex topic where technology and processes are constantly evolving. I’ve tried to make sense of this complex industry by explaining ideas in an unbiased way, looking at events and technologies holistically, and shining a light on participants and practices when warranted.

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