Programmatic Advertising 101: A Guide to Programmatic Ad Ecosystem

By 2022, 87% of all digital ads budgets in Asia were spent on programmatic ads. This article is a must-read to ensure that your brand takes full advantage of it

By 2023, it is expected that more than 90% of the industry will use programmatic ad buying. This is mainly because it can be used on a large scale and can automate even the most difficult tasks. Surveys show that programmatic advertising will only become more valuable with time as AdTech companies and agencies introduce new ways to make processes more efficient. This article is a must-read to ensure that your brand can take full advantage of programmatic ads.

Programmatic is a type of advertising that uses an automated process of buying and selling online advertising. This makes transactions more efficient and effective by optimizing the process and consolidating the digital advertising efforts on one technology platform. While traditional advertising includes requests for proposals, quotes, tenders, and negotiations, programmatic buying uses algorithmic software to buy and sell online display space.

Simply put, programmatic ads automate the bidding processes, allowing the publisher to sell and the advertiser to buy ads at scale. It is designed to replace human interference and negotiations with AI optimization and machine learning. The primary objective of programmatic advertising is to enhance transparency and efficiency in the industry for both the publisher and the advertiser.

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The regular programmatic value chain consists only of advertisers, publishers, supply-side platforms (SSP), demand-side platforms (DSP), data management platforms (DMP), customer data platforms (CDP), ad networks, and ad exchanges.

SSP belongs to and is operated by an SSP service provider. Publishers pay for the services to access the SSP platform and place inventory for the advertisers. Meanwhile, on the DSP, advertisers manage the process of programmatic media buying.

To process the data, the DSP providers often use external services of data management platforms (DMP) and customer data platforms (CDP). DMPs provide information about the audiences for whom the advertisement is made, and CDPs create, unify, and store audience data accessible to other marketing systems.

Other components are Ad Networks and Ad Exchanges. Ad networks play the role of facilitating and amalgamating publisher ad inventory for convenient purchase. It is supposed to help both publishers and advertisers. On the other hand, ad exchanges automate the buying and selling process on an impression-by-impression basis through real-time bidding (RTB).

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Unlike other providers, Adello, a leading mobile AdTech provider, developed its All-in-One Real-Time Programmatic Loop.

Adello’s services include:

• Custom Ad Unit Creator,
• Publisher White-listing and Site-listing,
• Data Management Platform that allows Custom API Integration,
• Pre-bid Fraud Prevention with AdCTRL™ Defender,
• Ad Server,
• DSP, and
• Viewability Tracking

This allows efficient campaign optimization based on near real-time data feedback. In addition, advertisers can receive intermediate reports on campaigns and creative performance.

The programmatic ecosystem comprises different technology platforms, available advertising deal types, methods of buying programmatic media, and spans a variety of ad formats. There are different kinds of offering and acquiring inventory in the programmatic ecosystem, and each has benefits and flows. Generally, they can be divided into 2 types: real-time bidding (RTB) and programmatic direct.

RTB includes an auction for the inventory and can be subcategorized into an open auction and private exchange. Meanwhile, programmatic direct offers a fixed price and a 1:1 relationship between a publisher and a marketer. Combining the programmatic deals allows for cherry-picking and thus getting the most out of the campaign in terms of performance and/or price. That is why Adello combines different types of programmatic deals.

Before defining which programmatic deal type to use, Adello would have to define the ad campaign goal. If the aim is to reach out to a new audience, learn their behavior, and open new opportunities to push brand awareness – an open auction would be a suitable option. Most of the traffic used by Adello is bought through open auctions. Open exchanges have millions of different publishers that provide an opportunity to advertise the product to the mass. The auction is handled using an RTB process. It is a quick process that lasts only a few milliseconds and occurs billions of times daily.

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These methods open a large pool of impressions and allow focusing more on the right place, time, and audience. The bidding decision is typically based on campaign targets, such as user demographics, location, online behaviors, the website’s main topics, etc. One of the main benefits Adello provides to its clients is near real-time intermediate campaign reporting.

If no inventory is available through the open market and Adello doesn’t have to fulfill advertiser preference for a specific publisher, we choose preferred deals. Such deals negotiate the preferred price but don’t require securing the inventory. Adello can either buy the traffic required to meet an agreed-upon price or pass it if a better matching inventory or price is available elsewhere.

However, some publishers sell only a part of their inventory on open markets or don’t sell there at all. If Adello needs to secure the inventory of those specific publishers, we use a private marketplace.

Programmatic guaranteed is the most favorable option for most publishers since they can sell a guaranteed amount of inventory for a fixed price. Adello uses this programmatic deal in 2 cases: 1) if the advertiser asks for a specific publisher, or 2) if inventory shows a good performance for a reasonable price.

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