Most advertisers think about programmatic and a media buying platform with a mixture of interest and doubt. After all, it is completely incomprehensible what is inside, what DSPs and DMPs are, and whether it is worth the money offered.
Understanding how it works may be difficult. Customers usually have to be content with the knowledge that the agency is buying some users on some sites. In fact, the audience is chosen, sites are relevant, and at the bottom of this black box, there is a valuable prize – a real contribution to increasing sales.
Let’s see the basics of this process and find out how it helps the advertiser’s business.
Basics of the Method
Programmatic is a method of purchasing online advertising at an auction, during which automated systems and algorithms are used. How does this method differ from purchasing the same contextual advertising that has both an auction and automation?
The answer is simple: it is about the audience. Contextual advertising focuses on people who are considered potential consumer (and who set relevant search queries). Contextual campaigns work with established demand and help you get quick sales.
However, these sales are limited by the amount of search demand. Programmatic helps to find a new audience and bring users who are at the very start of the sales to the website. It is explained in more detail here: https://www.bidmind.com/.
What Are the Components of the System?
The programmatic services market consists of three types of services:
- User data providers (DMP)
- Advertising inventory tools (SSP)
- Advertising purchase systems (DSP)
DMPs collect data about the behavior of Internet users from various sources (websites, Internet providers, plug-ins, etc.), store, process, and segment them using machine learning. As a result, user segments are formed that may be of interest to advertisers.
Standard segments are distinguished by demographics, location, and interests. More complex (custom) segments are developed at the request of an advertiser or agency. It is DMP that selects the audience to whom we will show ads.
On SSPs, individual websites or entire ad networks sell their ads automatically. At last, DSPs help to purchase ads at specified targeting and rates, the biggest of which also belong to search engines.
The last two parts of the system interact online. Once a user opens a web page, SSP auctions the showing of ads on that page. DSP evaluates the suitability of the user and offers its own price. SSP chooses the best offer and shows ads. The entire process takes a few seconds and ends before the page has even loaded.
The same auction model (Real-Time Bidding — RTB) is used by contextual advertising platforms and targeted advertising services in social networks. However, many consider RTB and programmatic synonymous. In fact, RTB is just one of its elements, just like an engine is part of a car.
As you can see, the initial black box is quite decipherable. You just need to use this tool correctly and clearly understand what you wish to get as an output.