The Process of Programmatic Buying (RTB) Explained
In this article we will discuss the more technical process of ad buying and selling by using the programmatic buying and selling process (also referred to as RTB).
What is RTB?
Programmatic buying or Real-time bidding (RTB) is a method of selling and buying online display advertising in real time. The method is based by buying one ad impression at a time. As opposed to the traditional inventory buying, RTB acts just like a stock exchanges and utilizes computer algorithms (i.e. Programmatic) to automatically buy and sell ads in real-time. For the advertisers, RTB offers the possibility of buying only the impressions they need at a price they are willing to pay by utilizing proprietary optimization algorithms of DSP systems and data from various 3rd party providers to fuel their algorithms.
How does the process works?
The players in this process are the User, the Publisher, the Supply-Side Platform or Sell-Side Platform (SSP), the demand-side platform (DSP), the Ad Network, and the Ad Exchange.
1. A user navigates to a publisher website.
2. The publisher’s web server loads up the web page and sends back an HTML code.
3. The browser is then notified on where to get the content and how to set it on the page.
4. Part of the HTML code returned to the browser will include a coded link known as an Ad Tag. That part is the same as in regular 3rd party ad serving (non-RTB).
6. Assuming the user already has that SSP’s cookie on their machine (and most users will) the SSP starts the auction by requesting bids from a host of demand sources, the DSPs.
7. If the user does not have an SSP cookie on their machine, their ad inventory can still be auctioned, but since nothing is known about that user, the price will be very low and more related to the site context than the user’s attributes. For the DSPs to set a high price on impression they need to know something about the user. This is where the SSP cookie ID comes in – packaged with the bid request is the SSP’s cookie ID.
8. Using all data, the DSPs all value that impression and submit a bid back to the SSP as well an ad redirect to send the user should their bid win the auction.
9. The SSP picks the winning bid.
10. The DSP redirect the winning bid back to the user.
11. From this point on, the process is the same as simple ad serving – The user calls the DSP.
12. The DSP sends the user the ad server redirect.
13. The user calls the ad server and it serves the user the final Ad to be seen on the website.
In summary, the SSP is a technology platform with the single mission of enabling publishers to manage their ad impression inventory and maximize revenue from digital media.
The DSP is a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts through one interface. Real-time bidding for displaying online ads takes place within the ad exchanges, and by utilizing a DSP, marketers can manage their bids for the banners and the pricing for the data that they are layering on to target their audiences.
All these factors and more help the DSP value the impression and with that to programmatically choose the Real Time Bidding on this specific user. As explained, the DSP is able to match the SSP’s cookie ID to their own cookie on that user, which is tied to a huge cache of marketer data and 3rd party data.