MarTech Primer: Advertising Technology and Demand-Side Platforms (DSPs)
Long gone are the days when purchasing ads on TV or Radio were sufficient for improving Sales performances. In 1994, the first banner ad appeared on Hotwired.com and thus, the emergence of Digital Advertising. With the introduction of Google AdWords (in 2000), Google AdSense (in 2003), and Facebook ads (in 2007), digital advertising further evolved by leaps and bounds.
Digital Advertising today involves understanding customer behaviors and thus introduces the need for a transition to Advertising Technology (AdTech). In this Primer, we shall discuss AdTech, Programmatic Advertising, and Demand-side Platforms.
What is AdTech?
AdTech is a portmanteau for Advertising Technology. It involves several software and tools for brands and agencies to strategize, deliver, and manage their digital advertising campaigns.
When talking about AdTech, the term Programmatic Advertising often comes to the surface as it is the most preferred choice of marketers for running ad campaigns.
But what is Programmatic Advertising?
According to HubSpot, “Programmatic advertising is a fancy term for the automated process of purchasing and selling online ads. This method gives advertisers the ability to place their ads on websites with little human interaction because of AI-powered algorithms.”
In simple words, programmatic advertising is buying and selling of ads through an automated bidding system instead of buying directly from publishers.
Advertising Technology allows advertisers to make the best use of their advertising budgets and manage their spend. It enables the advertiser to deliver the right content at the right time to the right consumer. Advertisers can leverage AdTech to target relevant audiences, obtain market information, and gain insights on their campaigns’ ROI.
AdTech is at the heart of the advertising ecosystem and comprises the following:
- Demand-side platforms
- Ad Exchanges
- Supply-side platforms
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A Demand-side Platform (DSP) is a programmatic advertising platform that allows advertisers and media agencies to buy ad inventory from publishers to manage multiple Ad Exchange and Data Exchange accounts via a unified interface.
The ad buying takes place through Real-time bidding (RTB) using intelligent software that bids on inventories through the auction. With DSP, advertisers can bid on display, video, mobile, and search ads from a wide range of publishers.
All Demand-side Platforms work with dynamic bids with parameters like maximum Cost Per Mile (CPM) or Cost Per Action (CPA) that are set by advertisers for Ad Optimization.
A DSP advertising solution automates the decision-making process making ad-buying efficient, faster, and cheaper. It allows real-time Campaign Performance tracking and ad optimization.
Publishers provide their available ad inventories through Ad Exchanges, and the advertisers through DSP decide which of those are relevant to them.
Demand-side Platforms connect multiple ad exchanges and allow advertisers to buy traffic from a wide range of websites. It offers detailed targeting based on geography, browser, demographics (such as age and gender), device, and OS targeting.
Top Players in AdTech
- Adobe Advertising Cloud DSP
- Amazon DSP
- Fiksu DSP
- The Trade Desk
- Verizon Media