What is programmatic Advertising? – To give a simple definition of programmatic advertising, we can say that it represents a means of buying and automatically optimizing digital campaigns rather than doing it directly from publishers.
Programmatic advertising replaces human negotiation with machine learning and AI-enabled optimization.
The objective is to increase the efficiency and transparency of digital advertising and related transactions. Both for the advertiser and the publisher.
This type of advertising, which appeared in the United States in the 1990s, is characterized by a Real-Time Bidding system in which ads are purchased simultaneously when a visitor loads a website.
This object will cover all the essentials you need to know about programmatic advertising, starting with real-time bidding.
Table of Contents
Understanding Real-Time Bidding (RTB)
RTB, or accurate-time bidding, is a way to buy and sell advertisements through real-time bidding, which means transactions are made during the time it takes to load a web page. i.e. about 100 ms.
Real-time bidding provides better and faster targeting, allowing you to buy and sell ads on a case-by-case basis, meaning only visitors within your target audience will be shown the ads/ads you want to serve.
A real-time command is a form of programmatic buying, but that doesn’t mean all programmatic advertising uses RTB.
The term “programmatic” means using an automated way of making ad purchases, and RTB remains the most common way to do this today.
Although approximately 90% of programmatic purchases go through real-time bidding, the programmatic advertising space offers other alternatives:
It’s a way to buy a guaranteed number of impressions on specific sites. It is usually used for hefty “premium” formats such as full-page advertisements, and it often involves a fixed price rather than an auction.
PMP (Private Exchange Buying) or private exchange purchase
The PMP is an invite-only marketplace where several publishers invite specific advertisers to bid on their ad inventory space.
This method bypasses ad exchanges. Where your shopping platform connects directly to publisher list. An sale usually takes place.
But the terms of the deal are pre-negotiat, which creates a more manual environment than the traditional RTB method.
So real-time bidding is only part of the programmatic advertising ecosystem.
It’s a way of auctioning ad space on a case-by-case basis. Which contrasts with a less sophisticat approach of “bombing” ads, and results in everyone seeing the same ad.
Other vital components must be in place for a programmatic system to work correctly.
You need a Demand Side Platform (DSP) connected to a Data Management Platform (DMP) on the advertiser’s side.
Suppliers or publishers use a supply-side platform (SSP/Supply Side Platform) to distribute their available inventory on one or more Ad-Exchanges.
That’s a lot of new terms to take in, but we’ll explain them one by one later in this article
. What is an Ad Exchange?
An Advertisement Exchange is where publishers meet with advertisers and agree on a price for displaying their ads.
It works much like a stock market but for digital display advertising.
Currently most ad/ad exchanges operate through real-time bidding. Whereby an ad purchase is made at the same time a company load a website.
The Ad Exchange sits in the central of the programmatic bionetwork, and it is connect to a demand-side platform ( DSP ) on the advertiser side and a supply-side platform (SSP) on the publisher side.
What is the Difference Between an ad net and an ad Exchange?
An Ad Network, or Ad Network, is a platform connected to several websites and offers inventory to advertisers on those sites. At the same time, an Ad Exchange/Ad Exchange is similar to a trading floor where advertisers can purchase ad space from multiple ad networks.
Publishers have often used ad exchanges to auction off their unsold inventory to the highest bidder after manually selling their premium inventory.
They throw their remaining ad space into a pool of other unsold space, hoping it will be bought up.
The rapid growth of programmatic ad buying has increased the relevance of ad exchanges, as most advertisers have seen significant benefits for their ad campaigns, such as better targeting and the time bidding system. Real.
Some of the most significant current ad exchanges include AppNexus, Microsoft Ad Exchange, and DoubleClick (owned by Google).
A listing exchange needs data to know which bidders are eligible for specific websites and audiences.
This is handl by demand-side platforms (DSPs) and supply-side platforms (SSPs).
Demand-side platforms (DSP)
A demand-side podium is a tool or software that allows advertisers to purchase ad placements automatically.
Historically, as more publishers offered online advertising opportunities, advertisers needed a way to automatically manage ad placements and purchases rather than dealing with vendors and brokerage firms…
Many editors considered these manual methods expensive and unreliable, and DSPs helped them solve this problem.
How Does a DSP Work?
An advertiser signs up with a DSP connected to an ad exchange.
The Ad Exchange is where the actual buying and selling of ads and inventory takes place.
A bid signal is sent to the exchange when a visitor accesses a website connect to the ad exchange. This then asks the DSP if the advertiser has any ads that could match the placement.
If so, the DSP sends a signal to enter a real-time auction with other advertisers competing for placement.
The winning bidder awarded the location can show their advertisement to the site visitor.
This remains the substance of programmatic advertising on the advertiser side.
Supply-Side Platforms (SSP)
Just as advertisers use demand-side platforms to manage their programmatic ad buying publishers. Use a supply-side platform to manage their display space.
Pardon us to be a manual process, where each publisher had salespeople tasked with contacting publicists and marketing ad space and has stayed computeriz through supply-side platforms.
The SSP attaches to an ad exchange and tells it what kind of inventory is available. This inventory is automatically auction off to the highest bidder thanks to the real-time bidding system.
The function of a DSP is to buy programmatic advertising planetary as economically as conceivable after publishers. Still, an SSP has the opposite purpose: to sell advertising space at the maximum possible price.
An SSP can connect to several diverse ad interactions to maximize the publisher’s exposure to potential buyers.
With an SSP, publishers can control their inventory more efficiently, set minimum prices, or impose specific buyers or channels.
You can select to target your ads with programmatic advertising in different ways, based on several criteria, to achieve better accuracy and better results in your marketing campaigns.
Here are the most common ways advertisers use to target their advertising campaigns and deliver them to the exact place at the accurate time:
Contextual targeting aims to serve ads bas on the context of a website. For example, a fashion brand may seen on the Magazine Elle website or an equivalent medium, but a company selling financial services will have better luck with Les Échos.
It is a type of contextual targeting that focuses on showing ads based on specific keywords. For example, if you sell automotive spare parts, you can provide a list of keywords based on that topic.
Your keyword list is match against the keywords and content us in the article to provide the best correlation for your ads.
Data Targeting (Audience Targeting)
Ads can also be serv based on user cookies rather. Than a website’s context A user who has visited your financial services site before may receive an advertisement for your brand even.If he sees France Football next because he has already shown an interest in what you offer.
Geographic Targeting (or Geolocation)
Brands use location targeting to reach relevant customers based on their site. If you run a physical retail store in Paris. It may not make sense to serve ads to people bas in Porto.
For international brands or online services. location targeting can serve specific ads in one language and be tailor to audiences in a particular country.
On average, only 2% of visitors convert when they visit your site—retargeting aims to bring back most of the remaining 98%.
Retargeting is a very effective way to re-engage people with your brand to convert.
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