Every marketer who’s been paying attention for the last 15 years has at least heard of programmatic advertising. But while the fast-paced world of ad exchanges might not be as sexy or dramatic as the New York Stock Exchange—or filled with a cast of fast-talking, Armani-wearing, cocaine-slinging traders, if Hollywood has taught us anything—it still is a fascinating combination of technology and advertising that should be a part of your digital marketing strategy.
If you’ve ever tried to peel back the curtain to learn more about PDA (and no, not that kind of PDA, sicko), you’ve probably been slightly overwhelmed by the various strings and levers and wires holding this whole ad ecosystem together. And if that’s the case, you’ve likely stared into the abyss just long enough to glean a trivia night’s worth of knowledge just so that if it ever comes up in conversation at your significant other’s work BBQ, you’re not mumbling random buzzwords into your Aperol Spritz until somebody changes the subject.
But like, how much about programmatic advertising do you actually know?
Let’s recap, starting from the stone age.
What Advertising Used to Be Like
Imagine having to sift through a rolodex, shmooze with publishers, and actually pick up the phone and (sweet lord) call people? Just the thought makes my millennial bones shudder.
Back in the day, as in almost two decades ago, whenever an advertiser wanted to buy ad space on websites, they would have to form relationships with publishers at these companies, send proposals, and sign contracts.
At almost every step of the ad buying and selling process, there were people shaking hands and signing physical contracts.
But with the rapid rise of both websites and advertisers, this method became unsustainable.
The systems that make up the programmatic advertising ecosystem of today have replaced the old school ways of advertising online and have turned what was once a drawn-out process into an almost-immediate transaction.
We likey instant gratification.
The Programmatic Ecosystem
It’s possible, even likely, that you’ve perused an infographic just like this one in order to visualise how all the bits and pieces make up the flawless engine that is programmatic advertising.
But ours is better. Because it’s got purple in it. So, please enjoy.
How Does Programmatic Work?
If you’re not one for infographics, here’s a quick summary of the programmatic advertising ecosystem, from the perspective of the advertiser, delivered in a series of haikus (jokes).
You want to run display ads about your brand on various websites. You shall henceforth be known as the advertiser.
Companies and individuals that own websites and apps are called publishers. They collect data about their visitors and list ad impression opportunities with an ad exchange via the supply-side platform (SSP).
Every time a user loads a page that has ad slots, the ad exchange receives the user’s personal details along with what ad opportunities are available on that page. It will also receive data about user location and other identifiers, such device type, screen size, etc.
The ad exchange then sends a bid request to all demand-side-platforms (DSPs) in the world with this information. The DSP is the platform where you, the advertiser, sets up your campaign, including targeting parameters and creatives. When your parameters match the bid request, you enter into an auction and whoever places the highest bid wins that ad slot. And thanks to technology, all of this happens in the blink of an eye.
If you want to advertise with a specific publisher, you can either bid on inventory through open or invitation-only auctions or pay for advertising deals at an unreserved fixed rate or guaranteed deal.
If your bid is the highest, your ad is directed to the server and published on the web page just as it’s loading. Every stage of this auction is completely automated and takes less than a second.
Of course, there are other platforms and baby steps involved, but that, my friends, is programmatic advertising in a nutshell.
This is a test-your-knowledge kind of post, after all.
Brush Up On Your Abbreviations
It’s really not that scary, but like all things technology, your understanding of jargon and the alphabetti trail of abbreviations it leaves in its wake may be the barrier to entry for many folks who simply don’t have the bandwidth to memorise yet another. Goddamn. Three-letter. Abbreviation.
So, before we give you our adorable little quiz, why not brush up on your programmatic abbreviations (not saying you need to review them before the quiz, but you know, just in case….*wink wink*)
Programmatic Advertising Jargon & Acronym Dictionary
Is a technology platform that acts as the go-between buyers and sellers of ad inventory. Ad exchanges facilitate various transactions and ad management from multiple ad networks.
Examples: Google Ad Exchanges, OpenX, AppNexus
A software that allows advertisers to buy inventory from multiple ad networks and manage their ad campaigns.
Examples: Facebook Ads Manager, Rocket Fuel, Amazon (AAP)
A software that collects and manages user data that can be used by advertisers to create audience segments.
Example: Salesforce Audience Studio, Oracle Data Marketplace, HubSpot
One of many ad networks where advertisers can bid on ad space for video, display, and mobile apps.
A premium marketplace reserved for top-tier advertisers who are invited by publishers to bid on exclusive ad space.
As the name suggests, RTB is the process of buying and selling ad inventory in real time. No human intervention is necessary, and the programmatic transaction takes less than one second.
As the mirror image of the DSP, the SSP is a software platform for media publishers and ad networks to manage and sell their ad inventory to advertisers.
This is by no means an exhaustive list (tech abbreviations multiply like bunnies), but if you really want to get a basic handle on programmatic, then you should at least know these.
Ready to test your knowledge about programmatic advertising? Let’s see you put your money where your mouth is. Consider this your knowledge assessment.
Programmatic Advertising Mini Quiz: Test Your Knowledge
In Conclusion: The Present & Future of Advertising Is Controlled by Robots
How did you do on your mini quiz? Did we smoke you? Did you ace it? Did you give up halfway? Are we asking too many questions?
Pass or fail, we’d love to show you how the whole thing works from behind the scenes.
Our Geeks are here to help you navigate the world of programmatic advertising