Why Programmatic Advertising?
Attracting attention is an inevitable way to reach a potential customer. Without the target group’s attention there’s no success. In the area of online marketing, however, attention is not always guaranteed. Among large amounts of content one’s own ad can disappear easily which is why programmatic advertising is becoming more and more significant in the online marketing world. Fully automated and individualized purchases and sales of ad spaces in real time make specific targeting possible and reduce scatter loss. Based on performance figures budgets can be used flexibly during the run-time.
With all these benefits and the ever-growing number of ad spaces there is no doubt at hand that professional Programmatic Advertising will become even more important in the future. We offer professional support in Programmatic Advertising and we adapt our work to your individual needs.
How does Programmatic Advertising work?
Programmatic Advertising is made up by two sides: Supply and Demand Side. The Supply Side represents online marketers who want to monetize traffic on their website through the integration of ads and primarily pursue the goal of profit maximization.
On the other hand there is the Demand Side which incorporates all advertisers who want to target users with their ads on external websites. Both parties use respective tools, which are called “Supply Side Platforms (SSPs)” in the case of the Supply Side, or “Demand Side Platforms (DSPs)” for advertisers. Matching SSP offers and DSP demands takes place on Ad Exchanges.
The auction process that occurs in the course of each impression could take place as follows:
- A user visits the website of a publisher and therefore generates one impression (per available ad space)
- The SSP registers that the ad space needs to be filled and sends an image request to all connected Ad Exchanges.
- The AdExchanges in turn pass the request on to all connected DSPs.
- WIthin the DSP all advertisers now evaluate according to the information about the impression that came with the image request if the user fits their selected targeting.
- If that is the case the advertisers places a bid on the impression.
- Within the DSP an auction now takes place among all bidding advertisers and the highest bid is forwarded to the AdExchange.
- On the AdExchange another auction among the highest bids and the connected DSPs takes place.
- The auction winner enters a final auction within the publisher’s SSP where all winners of the AdExchange auction bid against each other again.
- The highest bidder will place its ad on the respective ad space.
This process takes place with each impression. It takes about 200 ms which is why it’s called Real-Time Advertising. In theory each advertiser has the chance to bid on each impression that fits the targeting criteria. This represents an enormous potential if one considers that display ads are traditionally carried out via fixed or IO booking, in the course of which, for example, 1,000,000 impressions are purchased at a flat rate agreed in advance – regardless of which user, at which location and at which time these impressions are caused.