What Is Programmatic Advertising and How Does It Work?

Digital advertising is the most common and effective solution for promoting goods and services nowadays. Because of technological advancements, it became crucial for advertisers to find viable methods of virtual ad management. Programmatic advertising is a process of selling and purchasing virtual advert space automatically. This solution allows enhancing advertising campaigns without going through each step, from buying an ad to observing its performance manually. To make programmatic advertising truly beneficial, it is important to learn how do ad networks work and how to incorporate them in your own campaign.

The Pros of Incorporating Programmatic Advertising

Programmatic advertising is a solution that offers numerous advantages for both advertisers and publishers. To put it short, programmatic ad technology works faster, requires considerably less effort, and provides maximum efficiency by reaching all possible target customers. The benefits of PA for advertisers include:

• Scalability. There is access to all possible ad inventories, which helps with reaching out to much broader audiences than before.

• Flexibility. Adverts can be customized in real-time based on the response from viewers and different data gathered along the way.

• Improved targeting. More precision in ad targeting allows spending money more efficiently by reaching out to the exact potential clients you want.

• Effectiveness. Thanks to an automated process, more relevant adverts, and access to a bigger pool of publishers, your advertising campaign will provide improved results and bring more profit.

Publishers can also benefit from programmatic advertising greatly as it helps with increasing revenue. Some other advantages include:

• Accessibility. Programmatic advertising makes selling ad space much easier for publishers. They can automate the process and find suitable advertisers faster.

• Keeping contact. There are easy ways of contacting advertisers and discussing the details to make sure that both parties will receive advantages.

• Relevant ads. Only relevant adverts will be demonstrated to viewers and advertisers that come to the publisher's website thanks to the targeting technology.

• Increased efficiency. Costs can be lowered while earning more from the available advertising space.

Ad Networks and SSP Platforms

Both an ad network and an SSP platform work in a similar way collecting the inventory space for advertisers to purchase. Ad networks were there first, offering advertisers various assets from publishers consecutively. Supply-side platforms, or SSPs for short, appeared later and offered a more convenient way of selling assets through auctioning. In addition, these auctions are automated, allowing advertisers to place bids on an ad inventory easily.

Because ad networks were limited to specific geographical locations and audiences, advertisers had to find other more efficient ways of purchasing ad space. Supply-side platforms offer simple and quick access to the ad inventory globally. For this reason, using SSPs for buying ads is more convenient and effective.

Demand Side Platform Operation

DSPs are platforms that offer ad inventory from publishers to advertisers and ad networks. Advertisers can specify their ad requirements here, such as the target audience, aim of the campaign, and ad prices. The DSP then goes through the available advert inventory to find spaces that satisfy these requirements and buys them automatically and at the best prices. Real-time campaign optimization is also available through DSPs.

Understanding Ad Exchanges

An ad exchange is an integral part of programmatic advertising. These platforms are made for publishers and advertisers to negotiate the details and prices of adverts. These exchanges work in a similar way with the stock market, although virtual advertising is traded in this case. The majority of advertising exchanges operate like real-time bidding systems.

Ad exchanges are connected to both DSPs (demand-side platforms) and SSPs (supply-side platforms) to bring together publishers and advertisers. Ad networks collaborate with certain websites and provide advertisers with ad spaces on these web pages. Ad exchanges, on the other hand, feature multiple ad networks. Publishers usually come to ad exchanges to sell the remaining ad inventory by putting it up for auction. Advertisers with the highest bid receive these ad spaces automatically.

Final Thoughts

Programmatic advertising is an expected change from the previous solution as we strive to automate various processes and make them more efficient. Thanks to SSP and DSP platforms, a lot of processes can now be automated and deliver better results than manual work.