Introduction to programmatic advertising

  • 14 / 12 / 2022
  • Patrycja Gumola
Introduction to programmatic advertising

It is widely known that programmatic advertising has been a buzzword in the monetization industry for a while. And no wonder! Programmatic advertising solves many problems that digital publishers need to face nowadays. But how does programmatic do that? And how can publishers introduce programmatic advertising to their content? Let us answer these questions for you!

This system automates the processes of ad inventory buying and selling. It seems to have no limits when it comes to possible ad formats it can be used for, no matter if it’s a display, audio, or video ad. Moreover, thanks to the dynamic placing of ads on websites or mobile apps, programmatic advertising enables showing ad impressions in no time. Programmatic is a game-changer when it comes to technological advancement. It uses software operating on algorithms that take care of ad selling and placement in destined locations on given websites and apps. The whole process occurs within milliseconds. Automatization makes programmatic advertising a perfect way to monetize content while doing nothing completely. Money, indeed, doesn’t sleep – but you can.

source: https://giphy.com/

Programmatic definition

To put it simply, programmatic advertising replaces the manual and tedious work of advertisers who try to reach new clients and of publishers who want to monetize their content. While the traditional method involves direct inquiries, bidding, offers, and unnecessary, time-consuming face-to-face negotiations, programmatic uses algorithms to buy and sell advertising space with no manual work. What’s more, the programmatic system takes traffic and user data to deliver better-targeted ads. It saves the time, money, and energy not only of advertisers, but also of publishers, who can enjoy more effective ad inventory selling. The whole point of programmatic is to take the entire process to a more efficient level by delivering a scalable way of content monetization and bringing considerable revenue to both transactional partners. It’s a symbiotic, win-win situation.

source: https://giphy.com/

How does programmatic advertising work

Programmatic brings numerous advantages for publishers and advertisers. Now, there are many subtypes of this system. But for the first encounter with programmatic, we’ll explain how its most general form works – the open marketplace.

  1. A user visits a website or app powered with programmatic advertising and triggers the automated process to begin. It proceeds so fast that a user doesn’t even notice it.
  2. The website or app sends an ad request to a Supply-Side Platform (SSP) and informs that there is a need to display an ad. The publisher’s software sends a piece of information to the system that there is ad inventory available so that advertisers can start making offers on their side.
  3. From now on, multiple advertisers can bid for the ad inventory on the publisher’s website or app in a real-time manner.
  4. Available user data (such as localization, demographics, behavior, or online activity) are analyzed to display a best-fit ad that meets their needs. The usage of available data aims to ease and upgrade targeting processes. This information helps advertisers establish the best-fitting users who will most likely buy their products. Thanks to it, ads are displayed to the appropriate audience, increasing the chance of gaining their interest.
  5. Additionally, advertisers can establish the criteria of ad inventory buying that are the most suitable for them. The requirements are set through a Demand-Side Platform (DSP).
  6. DSP reviews information on the user provided by SSP to evaluate the value of a given ad impression (which can be described as an act of seeing an ad once by a person who visits a given website or mobile app).
  7. The value of the mentioned ad impression varies and depends on the before-set criteria. Once it is set, DSP can submit the offer to SSP.
  8. The information exchange is managed by Ad Exchanges, which drive auctions on both sides: advertisers who want to purchase ad inventory and publishers who want to sell it.
  9. The final decision about which advertiser’s offer wins is made by an auction system called RTB (real-time bidding). RTB manages the mentioned auction, so neither publisher (supply side) nor the advertiser (demand side) has to take place in the ad’s “injection” process – the system makes everything for them.
  10. All these processes and the final result of the ad placing mechanism occur within the time of a webpage’s loading. It ends when the website or app opens and displays the winning advertisement to the user.
source: https://giphy.com/

How to get programmatic solutions

Perfect! So now you know the basic ins and outs of programmatic advertising! This system is, however, much more than that. Programmatic can be divided into many subtypes that can be applied depending on the needs of both sides of the digital ad chain. For example, private marketplace works exactly like the above-described open marketplace, but has a limited number of participants that are selected based on specific criteria. But there’s also Programmatic Direct, which is a kind of hybrid between programmatic and direct deals, which means that it enables automated deal-making processes but under certain pre-established conditions. As you can see, programmatic has much more to offer than it seems!

Of course, it may sound complicated at first. And what’s even more difficult is to choose the right monetization method for your content. But why struggle with cracking that hard nut yourself when you can get help from someone who knows well programmatic and the industry? In optAd360, we help digital publishers from all around the world by delivering advanced programmatic solutions for various content types (from websites and videos, to mobile apps and games). Throughout many years of working in the industry and developing extensive publisher-oriented solutions, we’ve helped hundreds of content creators worldwide. Besides, our specialists live in different corners of the world, meaning that chances are that we also provide support in your language, so you can be ensured to get trouble-free communication and an individual approach. Get familiar with the examples of our previous cooperations in the optAd360 case studies section on our website. Maybe one day, we’ll add there a description of how we helped your business grow!

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