There are some moving parts to programmatic ad buying. I’m going to try and break this done a bit for you. The main concept for getting started is the capability for real-time bidding which is the acceleration process that boosts media buying to bid ‘right now’. This is an automated process of auctioning off available media impressions (the publisher) with the highest bidder (the advertiser).
How Programmatic Marketing Works
The technology requires a Demand Side Platform, for audience segmentation, and Data Management Platform, for the algorithm and supply of ads which is instigated through potentially a private deal, direct placements, or third-party data such as ad exchanges. An ad exchange is a marketplace of buying and selling ad inventory made possible through ad networks that aggregate publishers ad inventory and package them to sell. Publishers can then sell inventory real-time to advertisers and they bid on the audiences they want to reach. This process is not much different than the stock exchange.
Tools Needed for Advertisers and Publishers
For media agencies, you need a demand side platform where the bidding on inventory takes place as well as features like frequency capping, budget pacing, and campaign management. A data management platform is where the audience data becomes actionable for marketing. The ad server is where advertisers can manage display campaigns such as focusing on rich media and dynamic creatives.
As you can see, there are many moving parts to this program. There are different tools for advertisers or publishers to connect their advertising opportunities for others to bid on them and buy them. The main tool for publishers is their selection of a sell side platform that provides access to ad exchanges to make inventory available. But, on the advertisers side, there are different results based on how audience data is assimilated, which ad exchanges and networks their supply sources are connected to, and what level of transparency the tool has on the data they use. From an ad serving and bid management standpoint, some tools provide total control for the media agency buying on behalf of the advertiser and others provide limited control into setting up ads, trafficking them, and what data is available for viewing reporting.