What Is Programmatic Advertising And How Does It Work?

Programmatic Advertising : The Internet has changed everything. The world of communication is possibly one of the worlds that have seen the most changes and advertising, in particular, saw an unimaginable leap a few years ago when the only way for brands to reach their potential customers was to search for publications whose target audience resembles, more or less, yours, and then buy space there. Today everything has changed, that’s why we want to talk to you about programmatic advertising.

It is true that during the early years of the Internet, the ad buying system remained very similar to that of a lifetime, with the purchase of banners or other ads on web pages whose audience interested the advertiser, generally reaching an agreement for the CPM (cost per thousand impressions).

However, technological evolution, the appearance of real-time bidding, and, above all, big data have resulted in a radical change.

Principles Of Programmatic Advertising

In a previous post we have already talked a little about programmatic advertising, but today we want to tell you about the process in more depth. Fundamentally, it is the automated purchase of advertising impressions. That is, instead of buying a package of impressions in a medium, the impression is purchased individually. Three basic actors are involved in this process:

Advertisers: 

The brands that want to make themselves known and the agencies that support them, adapting their ad to the appropriate media.

The publishers: are the ones who put both the technological means and the spaces so that the message reaches the user.

Users: Obviously, if there are no visits and there is no one to see the ad, that is, none of this would make sense.

What is the process?

Every time you access a web page you are launching a mechanism that lasts just a few milliseconds and that may seem incredible. It is a process that would be impossible without big data and the large amount of data that companies have accumulated from users.

The process is the following:

• Pick (choice): the advertiser establishes the criteria under which he wants his ads to be displayed and enters them into an advertising platform.
• Match – The platform searches the networks and buys the indicators that match the advertiser. Websites sell their data to platforms, so it’s relatively easy to do.
• Trigger: a user enters the web page. At this time the following occurs:
  • Cookies are made with the necessary data and the user’s profile is established.
  • Start an automatic bid between the advertisers for whom that profile is interesting.
  • The editor chooses the one that most interests him..
• Tracking (monitoring): Once the ad has been displayed, the user’s reaction is analyzed and the results of the campaign are tracked in real-time.

This process is repeated thousands and thousands of times, in just nanoseconds, each time a web page is opened.

Platforms That Make Programmatic Buying Possible

Programmatic buying would not be possible without these participants:

• DSP Platforms (Demand Side Platform): it is the platform in which the advertisers establish their parameters and the one in charge of making the bids as well as measuring the results obtained.
• SSP platforms ( Sell Side Platform): this is where media and publishers introduce the offer of available spaces. It is an automated business management tool for websites to manage their ads.
• DMP platforms (Data Management Platform): they seek to perform centralized data management, allowing advertisers to only have to indicate the audience they are interested in. They normally work with the advertiser’s own data (1st party data) or provided by external sources (3rd party data), but they can also work with data from a specific medium provided by the advertiser (2nd party data).
• AD Exchange platforms: they are the ones who put advertisers in contact with those who offer their spaces.
• Trading Desk platforms: they are in charge of automatically managing the purchase of advertising from media agencies.

We hope that this post has helped you to learn what programmatic selling is and how it can be useful to you.