What is Programmatic Advertising?

Programmatic advertising is the automated buying and selling of online advertising. Well think about this, a few years ago, if Apple wanted to show ads for their newly launched iPhone on websites like BBC.com and few others. The below process will be followed, more or less

  • The marketing team at Apple will reach out to bbc.com sales team and other websites and ask them to give them a proposal for this campaign
  • They will negotiate on the number of impressions, CPM rates, Ad slot positions and sections of the website
  • Apple marketing team will sign the booking order and share the creatives or banners with bbc.com trafficking team and after will test and setup the campaigns
  • bbc.com team will share the report of the campaign
  • And everyone is happy!

However, if you haven’t worked in those times, you wouldn’t know how hectic and inefficient the process was! It needed a lot of meetings, leg work, paper Insertions orders and BOs and invoices and agreements

Programmatic Advertising made all of this process of selling and buying of Ad inventory simple!

All this process can be done with few clicks on programs/Platforms like DSPs and SSPs e.g DV360 and Google Ad Manager. Thus the name Programmatic Advertising!

Remember, Programmatic Advertising is a buying mode which automates the Ad buying and selling process. There are actually many modes in which the Ad inventory is bought and sold:

  1. Programmatic Guaranteed deals
  2. Private Marketing place deals
  3. Open Auction deals

I would recommend to watch the below video to have a complete understanding of the ecosystem. I explain the evolution of the Programmatic ecosystem from the beginning. You will also understand the different parties involved in this process like DSPs, DMPs, Ad Servers, SSPs, Ad Networks, Ad Exchanges and how to Advertisers and Publishers buy and sell Ad Inventory respectively

Life of a Programmatic Ad Impression

This is probably the simplest explanation of what happens in the background from a user going to a website to the time he views an Ad that was transacted programmatically.

  1. Suppose a user visits a website abc.com. The request goes to the abc.com server which returns the source code of the website. The website developer has also added Ad Tags in the code to show the ads depending on which platform they use.
  2. When the source code is rendered in the browser, the Ad Tags (snippet of code) make a request to the Ad Server (SSP) e.g DFP requesting an ad for the slot created by the ad tag on the website. Along the ad request the browser passes the users information like cookie IDs, time of the device, IP address, language etc
  3. The Ad Server in turn passes this information to an Ad Exchange and asks the Ad Exchange to sell the impression for the best possible value.
  4. The Ad Exchange acts as a marketplace where all the connected DSPs (like DBM) and other exchanges take part in the auction. For an example, the bid request passes the information like ad slot is on abc.com, 729×90, user is based in Dubai, and cookie ID (previously was searching for shoes).
  5. All the advertisers who are targeting this combination or a subset of this combination would have setup bids, and their respective DSPs will return the bid responses to the Ad Exchange with the creative they want to show on the slot. If the advertiser is using audience segments to identify and target users in a particular segment, he can integrate DMPs to select which impressions to buy.
  6. The Ad Exchange selects the bid responses from all the DSPs and exchanges and selects the winner with the highest bid. The winning creative (Ad image, video etc) is either directly sent to the page or though SSP.

The user browsing the internet views the ad on the website. All of this happens in less than a half second

Sounds interesting so far?

I have created several courses and video on Programmatic Advertising platforms where you will know step by step about these platforms from beginner level to be an expert. I would recommend to watch these course free on YouTube or you can buy them on uDemy where you will get a certificate of completion and lifetime access to the updated versions

uDemy courses which might help you:

The below is a list of my uDemy courses which are Highest Rated and Best Sellers if you want to learn further and make a solid career within this space

Before you, I would recommend to watch my personal favourite video Programmatic Advertising explained to have a solid understanding of the Programmatic Advertising ecosystem and the evolution. This video will help you to get familiar with the fundamentals of Programmatic Advertising and Display Advertising

Happy learning folks!

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