The Process of Programmatic Advertising 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?
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 on buying one ad impression at a time. The traditional media buying process involves a lot of manual work, typically with several requests for proposals (RFPs), human negotiations and manual insertions of the orders (IOs), which makes it slow and inefficient. As opposed to traditional inventory buying, programmatic buying acts just like stock exchanges and utilizes computer algorithms (i.e. Programmatic) to automatically buy and sell ads in real-time. For the advertisers, RTB Programmatic buying 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 work?
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’s 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 the 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 redirects 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.
The Risks Of Programmatic
While this third-party ad serving system is necessary to fill ad inventory and to generate greater revenue – the flip side leads to user and brand harm, and sometimes ruin. It’s an important moment for publishers. Perhaps most importantly, publishers need to protect their users against ad quality and security issues like malicious or deceptive ads, as well as operational issues like latency, which can drag down the user experience and bring it to a screeching halt.
GeoEdge has long worked to make websites safe for publishers and their users, and free of nuisances that corrode the user experience and the trust publishers work so hard to build. Unfortunately, publishers don’t have complete control over everything that appears on their sites, and for those whose revenue derives from the unruly world of programmatic, violations aren’t always directly their fault. The new regime is strict, and the updated standards could force publishers to reimagine large portions of their advertising architectures.
GeoEdge has long upheld the idea that it’s not enough to simply block bad ads. Publishers deserve the option of replacing blocked low-quality or unsafe ads with alternate ads, approved in advance by the publisher, so the affected ad slot can still be monetized.
Manually monitoring and blocking bad ads, for a great share of publishers, is not a sustainable method. Publishers need automation, and they need levers of control to set the criteria that meet their unique needs. Strong ad quality assurance helps publishers uphold their duty to their audiences, delivering information and entertainment.
GeoEdge empowers you to boost user engagement, strengthen your reputation, and open new monetization opportunities, all while serving engaging and secure.