WTF is Programmatic Advertising?

Photo by: Adobe 

Programmatic advertising sounds like it’s something that is super important and complicated, but it’s not that complicated in concept.  Programmatic Advertising is simply the automated process of buying and selling digital advertising inventory with technology by using real time bidding, which all happens via computer software and ad servers.

Programmatic advertising was formed to help publishers monetize unsold Digital Advertising inventory.  It allows an advertiser to buy inventory in a real time bid auction, and it allows publishers to sell their inventory via auction or using a pre-fixed negotiated rate.  Before there was an “automated” option through Programmatic, publishers would sell their unsold inventory to an Ad Network and then the Ad Network would re-package the inventory to be sold as a bundle to an advertiser with little transparency into the actual websites included in the bundle.  For example, the un-sold inventory from a publisher, lets say- “Moms.com”  would be sold to an Ad Network then bundled with other similar content from other sites with un-sold inventory and then re-sold to an advertiser as a “Mom” target.  The issue here was that there wasn’t always a lot of transparency in what websites were being purchased in the bundle at an Ad Network, which would cause issues for some Advertisers.    

There are 2 types of Programmatic Advertising software- DSP and SSP, and you will need access to one of the other (as a buyer or seller) to participate in Programmatic buying and selling.

DSP (Demand Side Platform)- is a software that enables advertisers to buy inventory from multiple content providers via automation by use of auction and bids.  Below are some examples of common DSPs.

SSP (Supply or Sell Side Platform)- is a software that enables networks and publishers to sell inventory, and connects with multiple ad exchanges, data management platforms, DSPs – or Demand Side Platforms, and Ad Networks

*Note: Some SSPs also have DSPs

There are a few different types of Programmatic Campaigns:

• Programmatic Guaranteed (PG)

• Preferred Deal

• PMP (Private Marketplace)

*Programmatic Guaranteed (PG)- Google defines this as “A programmatic deal where the Seller and the Buyer negotiate a price and terms for inventory that's reserved (guaranteed) for that buyer. Inventory is designated only for that buyer at that price. “

Source: (Google 360 Ad Manager Help - Programmatic Guaranteed vs. Preferred Deals)

* Preferred Deal: Google defines this as “A programmatic deal where the Seller and the Buyer negotiate a price and terms for inventory that the buyer can optionally buy. The buyer has an initial, or "preferred," opportunity to bid at the negotiated price when there's an ad request for the inventory. Preferred Deals are non-guaranteed because:

• The inventory negotiated isn't reserved for the buyer—you can opt to reserve it in a guaranteed campaign for a better price.

• Buyers aren't required to buy the inventory.”

Source: (Google 360 Ad Manager Help - Programmatic Guaranteed vs. Preferred Deals)

*PMP (Private Marketplace)- Taboola defines this as: “An exclusive programmatic deal which only certain advertisers are invited. It functions like an open RTB auction, but it’s exclusive to select ad buyers. With PMP programmatic deals, publishers can hand-pick trusted brands and advertisers gain premium access to high-quality inventory.”

*Source: https://blog.taboola.com/types-of-programmatic-advertising-deals/

Programmatic Advertising is a preferred option for large Advertisers because there is more control for the advertiser/media agency buyer to upload creative directly to the deals themselves vs. sending their assets to a content provider, eliminating the manual process (which is known as the Digital Ad Trafficking and QA (Quality Assurance) process.  Instead, the Advertiser will send the content provider the below information:

Seat Name: (or the name assigned to identify a specific buyer that is participating in an auction)
Seat ID: (or the unique ID created to identify a specific buyer that is participating in an auction)
DSP: Demand Side Platform

Campaign Details: (Start/End Date, Budget, Etc)

Once the content provider has the above details from the advertiser, they will work to set up the deal and will create a “Deal ID” for the advertiser to find the deal in the DSP to upload the creative to the campaign, and launch. The advertiser then will be responsible for responding to bid requests.

So in simple terms, all Programmatic Advertising really is is automated Digital Advertising selling and buying.