Programmatic buying unpacked

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Simply put, programmatic refers to the buying and selling of online media through the use of software or technology. It's the process of automating aspects of the media buying landscape for easier, smarter more targeted delivery.

To unpack more we need to look at the basic components of digital media buying. Historically we have had two parties involved, the advertisers (brands, agencies) and publishers (websites, blogs, platforms, apps). Traditionally the advertisers have bought space from the publishers, and programmatic is no different, the process is just automated through the use of software. In the programmatic world there is a third and key component - data.

Three core components of programmatic buying:

1. Data Management Platform (DMP) - Data

2. Demand Side Platforms (DSP) - Advertisers

3. Supply Side Platform (SSP) - Publishers

Data Management Platforms (DMP)

As the name suggests the DMP is the central point where all the data relevant to creating targeted campaigns is stored. This is a very simplistic view of how these complex systems are set up. A DMP is often not a single system and could be made up of many different tools and API's serving reporting, optimisation and targeting functions. This makes DMP's hard to set up and in light of this specialist agencies or suppliers are often used and a 'seat' at their trading desk is purchased, streamlining this entire process for media buyers.

Demand Side Platforms (DSP)

This is a platform for advertisers to buy ad space. Instead of contacting a site directly that fits the targeting criteria of their campaign, advertisers are able to use the DSP to input their targeting and campaign criteria, the DSP then links this data through the DMP with multiple networks and inventory suppliers. Some of the targeting options include location, time of day, age and recent purchases.

Supply Side Platforms (SSP)

As the name suggests the SSP is where the advertisers with inventory can be found. This is done through individual advertisers normally signing up with an ad network who in turn link up to an SSP. This means an SSP can have access to thousands of publishers. The SSP also assists with delivering the site content as well as with things like audience data, payment and reporting. DSP's are then able to access the SSP's through the filter of the data management platform and create powerful targeted campaigns.

But how does my creative/content end up in front of my target audience?

Real Time Bidding (RTB) is the process through which our ad's are show in the programmatic world. The process goes something like this. A user arrives on a publisher's website and begins browsing the content. This will then trigger the SSP and let it know that there is inventory available, i.e. there is someone on one of its supplier pages and that there is the potential serve an ad to.

The SSP then makes contact with the DSP and gives it some information about the user. This then triggers an auction between the various DSP's that may be linked to the SSP, bids are placed in real time and are based on a bidding strategy set by the advertiser and in line with the targeting and cost parameters set. The winning bid is then displayed by the SSP on the publisher's site.

This process happens in split seconds and is done automatically with no further input from the advertiser, if the targeting matches the campaign goal a bid is placed, if the data indicates it's the wrong audience then no bid is placed.

It is through this process that online campaigns can adapt and become more relevant and powerful in the ever changing digital space. Here is a great visual break down of how things fit together.

So to wrap things up I think we can see that programmatic advertising is not as scary as we first thought, yes there is some complicated tech behind the scenes but on face value it is a fairly straight forward process that can take our marketing to the next level.