Programmatic advertising has been a buzzword for many years in the marketing industry, and for good reason.
The term “Programmatic advertising” refers to how ads are bought and sold in the advertising space and is different from traditional media buying in that it uses automation to analyse user signals to serve ads to the right audience, at the right place, at the right time.
Programmatic advertising is cost-effective in nature, among other things, which means that even the smallest of publishers and advertisers can use it to achieve their objectives.
Before programmatic advertising, digital ads were bought and sold manually, making the process expensive and unreliable. But Programmatic advertising has changed the game by using automated technology that uses algorithms for media buying.
In the past, ordering, setting up, and reporting on ads was a completely manual process. But now, thanks to AI and machine learning (the primary driving forces behind Programmatic advertising), advertisers can easily automate the sale of ad inventory in real-time, ensuring that ads are set up to target the most opportune audiences.
Programmatic ads rely on many different platforms to create an entirely automated process that reduces the need for manual input. The result? Advertisers can buy ad impressions based on user signals and contextual cues.
The difference between Programmatic advertising and traditional Display ads
It’s easy to confuse the two, especially since Google’s recent automated and real-time bidding advancements for Display ads. But the biggest difference between Programmatic advertising and traditional Display ads is how ads are bought versus how ads are displayed.
The second biggest difference is the ability to buy ad space across multiple platforms simultaneously.
Traditional Display ads are limited to one ad network, for example, the Google Display Network, while Programmatic advertising has the ability to use multiple platforms, such as sell-side or supply-side platforms (SSPs) and demand-side platforms (DSPs). Allowing advertisers to buy ad inventory across an open network of platforms.
Both ads placed via Programmatic advertising, and traditional Display ads allow the advertiser to control the following aspects of their ad campaigns:
- Audience
- Bidding Strategy
- Budget
- Creative assets
- Placements
Programmatic advertising platforms
There are three main types of platforms, namely:
1. Sell-side platforms or supply-side platforms (SSPs)
2. Demand-side platforms (DSPs)
3. Ad exchanges
1. Sell-side platforms or supply-side platforms (SSPs)
An SSP is a programmatic platform made for publishers to facilitate the sales of their advertising impressions.
These platforms enable publishers to sell their ad impressions to advertisers in real-time. SSPs, as they are sometimes known, include both DSPs and ad exchanges.
An SSP is an advertising technology used by publishers to automate the selling of display, video, and native ad space on websites and apps based on impressions.
The sell-side or supply-side platform’s usefulness lies in its ability to connect publishers to ad networks, data management platforms, ad exchanges, and DSPs in order to sell ad inventory for publishers.
How it works
Before Programmatic advertising, human sales teams were employed to manually allocate ads to spaces online. However, with the rapid rise of online advertising, competition for the same ad space has grown exponentially, rendering manual placement inefficient.
Today, SSPs work with DSPs using programmatic advertising technology to do a number of things that include:
- Reviewing advertisers’ and publishers’ total ad space
- Determining the bidding range
- Offering recommendations for the best match depending on the advertising space
Within the SSPs advertisers can set filters such as ad format, target audience, rates for ad spaces, and more to sell their ad inventory. SSPs typically require a certain volume of traffic before accepting a publisher.
The most popular SSPs for publishers include:
- Google Ad Manager
- Amazon Publisher Services
- OpenX
- Google AdMob
- Yahoo Ad Tech
- TripleLift
- PubMatic
- Verizon Media
- Xandr (Microsoft)
- Index Exchange
- Sovrn
- Magnite
- Media.net
- Criteo
The most popular video SSPs include:
- SpotX
- Teads
- AdColony (now DigitalTurbine)
2. Demand-side platforms (DSPs)
A DSP is a type of software platform that enables advertisers to buy advertising with the help of automation. These DSPs are powerful marketing automation tools that allow advertisers to buy high-quality traffic at scale with minimal effort. They also provide automated, centralised media buying from multiple sources.
How it works
First, the advertiser uploads creative assets, sets up audience targeting, and determines a budget for campaigns. This is all done via the DSP dashboard.
Once creative assets are uploaded, the DSP looks through its network of publishers for sites and mobile apps that fit the advertiser’s criteria and makes a bid for placement. After this, the DSP resolves the bid, places the ad, and manages the payment. This all happens in a matter of milliseconds.
Some of the best DSPs include:
- Display & Video 360 (Google)
- The Trade Desk
- Amazon DSP
- LiveRamp
- Adobe Advertising Cloud DSP
- StackAdapt
- Amobee
- Yahoo Ad Tech
- AdRoll
- Basis (formerly Centro)
- RhythmOne
- Choozle
- BrightRoll
Some DSPs for connected TV and video include:
- TubeMogul
- OneView (Roku)
- MediaMath
When choosing a DSP it’s important to choose one with the features and inventory you are looking for. Some offer self-serve advertising, while others offer both self-serve and full-managed service (most likely to cater to larger advertisers or agencies).
3. Ad exchanges
Ad exchanges facilitate the buying and selling of digital inventory using real-time bidding (RTB).
An ad exchange is a digital marketplace where advertisers, agencies, publishers, SSPs, and DSPs can bid on advertising inventory from a number of publishers.
How it works
Real-time bidding (RTB), the most commonly used bidding method, is facilitated through a process that involves SSPs, DSPs, and ad exchanges.
An ad exchange allows SSPs and DSPs to communicate with each automatically other so that publishers and advertisers can buy and sell inventory through real-time bidding (RTB).
The most popular ad exchanges include:
- Xandr (Microsoft)
- Verizon Media
- OpenX
- PubMatic
- Google Ad Exchange
- Index Exchange
- Magnite
- Smaato
When choosing an ad exchange, It’s important for publishers to research options carefully and pick platforms that align with their goals.
Conclusion
Knowing the basics of programmatic advertising can certainly help you get started with creating a new marketing strategy that incorporates programmatic advertising. But the best way to get the most out of your programmatic ad campaigns is to hire a marketing agency that understands your audience in detail and can build a programmatic marketing strategy backed by existing data.
