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Programmatic advertising ad spending reaches new heights every year. By 2022, the programmatic advertising ad spend is expected to reach $100 billion. The new marketers trust programmatic advertising to build and expand their businesses. So, a wide range of opportunities are available in programmatic advertising. If you are a beginner in programmatic advertising, then this article will help you get all the information you need about programmatic advertising.
Software or Program used to buy and sell the digital ad space is called as “Programmatic Advertising”. Rather than buying and selling the ad space, it helps to do targetings, optimizations to the digital campaigns. In this post, I will explain programmatic advertising in simple words.
– sridaran baskaran
Rise Of Programmatic Advertising
In earlier years, sales representatives of the websites reached out to advertisers and agreed to place their banner on their website for a specific period. The website developer just uploads the ad banner on their local ad server and displays the ad to all persons. Around 1995, multiple news websites owned by the same company created a central ad server. So, they can switch the ads between their websites.
After that, the number of websites grew very quickly than the number of advertisers. So much ad space was available to show advertisements. But, that many advertisers were not available. So, large quantities of ad space were unsold. To reduce the unsold ad space, ad networks were created. The ad network’s duty is to collect the unsold ad space from various publishers and make it available to the required advertisers at a discounted price.
Still, the problem for the advertiser was ” targeting “. Even though they placed their advertisement on premium websites they were not satisfied because they didn’t know who saw their ad. This requirement created a way for “Programmatic Advertising”.
Programmatic advertising is software that is used to buy and sell ad space in an automated way. Also, it provides targeting, optimizing, and reporting capabilities to advertisers. Many of them are confused with programmatic advertising and real-time bidding. Real-Time Bidding is one part of programmatic advertising. But note that, all programmatic advertising is not done through Real Time Bidding.
What is Real Time Bidding and How Does Real Time Bidding work?
Before diving into the process of Real Time Bidding you must be aware of a few terms mentioned below,
Advertisers: Who wants to buy an ad inventory space [ad slot] to show their ad. If you see Boost Advertisement when you visit a web page, here boost is the Advertiser.
Publisher : Publisher means Website/Application, where the inventory space [ad slot] is available. One publisher can hold one or more sites/apps.
DSP: DSP is a Software that can support real time bidding, targeting, and reporting etc. [What is Demand Side Platform? How Does It Work?]
SSP: SSP is software, publishers use this software to manage & sell their ad inventory in an automatic way. By using SSP, publisher can serve display, video, native ads on their websites, Apps [What is Supply Side Platform (SSP)? How Does It Work?]
Ad Exchange : Technology that allows advertisers to buy and publishers to sell advertising in real time.
Bid Request : Bid Request is code or call request. Information about the user, cookies, user id, browser information, ad layout so and so information available in this request.
Read More Here : 20+ Digital Advertising Terms & Definitions You Should Know
Advertisements are not showing on every website. If the website owner is interested to show the advertisement on his website/application to make some money then the site owner should do some work to display advertisements. That work is called “Monetization”. For example, if I have the interest to show an advertisement on this website : https://srimarketingstrategy.com/ to make some money means I have to register in ad exchanges like google Adsense and paste their code in my websites. So when the user opens my website, the browser loads the contents along with the ad code.
Website contents retrieved from my hosting server and loaded ad code send an alert about the ad space available to the ad exchange. Ad Exchange will send the ad request to all the connected demand-side platforms. Once all bid responses are received from the demand-side platform, real time bidding (real time auction) occurs at the ad exchange. Who bids more will win the auction and ad exchange will send the winning bid notification to the corresponding demand side platform. Then demand site platform sends the ad code to the browser. The browser fetches the ad banner and displays the ad to the user.
Real Time Bidding Step-by-Step Process
0 Seconds : User opens or refreshes the webpage and browser loading for retrieving web contents.
0.04 Seconds : Ad Code also loading and a bid request is sent to SSP to get an ad. SSP asks its server whether we have any advertisements to respond. If there is no ad then SSP forward this bid request to Ad Exchange.
0.08 Seconds : Ad Exchange now forwarded that bid request to Multiple DSP’s
0.10 Seconds : Ad Exchange sends user’s profile, cookies information, website category, blocked category, layout etc to multiple DSP’s
0.12 Seconds : Every DSP match the received information to their advertisers targeting [Already Advertisers created campaigns in DSP with multiple targeting]
0.125 Seconds : If targeting matched then DSP generate optimal bid for winning the auction
0.13 Seconds : All DSP’s sends their bid amount to the Ad Exchange
0.14 Seconds : Now Ad Exchange compares all the bid responses and selects the winning bid
0.18 Seconds : Ad Exchange sends the selected bid price and ad tag to the publishers ad server
0.19 Seconds : Publisher Ad Server tells the browser which ad to display
0.23 Seconds : Browser loads that ad tag and request send to Advertiser’s Ad server. Advertiser Ad Server sends Ad to browser
0.31 Seconds : Browser displays Ad and sends information to the corresponding DSP
0.36 Seconds : The entire process gets completed.
Advantages of Real Time Bidding
>> Advertisers can buy the impression when a user is matched with their targeting. So Advertiser’s costs saved.
>> By using cookies it is very easy to identify the users. So advertisers can apply frequency caps and limit the number of views for an ad.
>> Instead of buying bulk impressions advertisers can purchase what they want in real time bidding
>> All ad slots filled with an Advertisements. So loss is minimized by real time bidding for the publishers.
>> Instead of selling entire ad slots for a low cost, premium sites can earn more revenue in real time bidding
>> Before winning the auction, advertisers can know about the website so they can ignore bad quality websites.
Conclusion
In programmatic advertising, various important elements are available. All of them work together to make this possible. Here, I explained about programmatic advertising and real time bidding. Hope, this article provides you an enough information.
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