100 Programmatic Ads concepts you must know

Programmatic advertising is a cutting-edge internet advertising method that takes some technical understanding to comprehend. However, because of the great demand, low saturation, and decent compensation, it is still a highly sought-after position in digital marketing. In this essay, I’ll go through the 50 most critical programmatic advertising ideas you should understand. These ideas can assist you in getting started with programmatic advertising.

Consider a website like the New York Post a few decades ago if you’re curious about how programmatic advertising came to be. They expected one million visitors to their website in the following month, which meant they had one million ad slots ready to sell. All of their advertising partners, including Nike and others, purchased half a million of these ad places for the next month. But what happens to the other half-million chances to sell advertising to the New York Post? Those ad slots are being wasted.

To address this issue, major firms in this market such as DoubleClick, Google, and Yahoo developed programs to sell these ad slots. This was known as residual inventory, and the purchasing and selling of these ad spaces on websites and applications using programs were known as programmatic advertising since it was all handled by specialist software.

An ad space, which serves as a placeholder for an ad, is the fundamental building piece of programmatic advertising. It can be found on a website, app, or other digital properties. These ad spots are known as ad slots, and they are also known as ad inventory because this is what website and app owners sell.

When looking at programmatic advertising as a whole, three parties are engaged. The first party is the corporation that owns the website and app and sells advertising space. These are referred to as publishers. Publishers have an audience that visits their websites and applications for information, news, entertainment, and so on. Publishers include bbc.com, Candy Crush, and newyorktimesgold.com.

On the other side, some firms desire to offer advertisements to visitors of websites and applications. Advertisers include Samsung, Nike, and a doctor’s clinic that displays advertisements on a website. Consider this situation before programmatic advertising to better understand the function of the third party involved.

Whenever an advertiser was interested in showing ads on a publisher’s website, they would sign a contract that mentioned costs, the number of ads, and other details. This contract was called an insertion order. So if Nike wanted to show ads on bbc.com, someone from Nike would get in touch with the sales team of bbc.com, and they would discuss what they wanted, how much money they wanted to spend, the number of ads they wanted to buy, and they would physically sign an insertion order.

However, since the arrival of programmatic advertising, the entire process is done through programs and internet software, with organizations such as Google, The Trade Desk, and many others engaged. As a result, at least three parties are usually engaged in a programmatic advertising ecosystem: a publisher, an advertiser, and a programmatic advertising business.

The ad tech business that delivers them must handle payments and facilitate negotiations between advertisers and publishers. There is no prior connection or link required between the advertiser and the publisher, and an advertiser in India can book ad inventory on a website in the United States or Africa. To give you an idea of scale, utilizing programmatic advertising, millions of advertisers buy inventory on millions of publisher properties every second, all using sophisticated back-end software known as ad exchanges.

Google Ad Exchange is one example of an ad exchange, and it is arguably the largest. Advertisers and publishers must be linked to these ad exchanges to participate in programmatic Internet advertising. To acquire inventory in an ad exchange, advertisers must use software known as a DSP or a demand-side platform, which is similar to utilizing brokerage trading software such as eToro or Robinhood to participate in the stock market to buy and sell equities. The phrase “demand side” is utilized because marketers drive demand for inventory.

DataXu, The Trade Desk, and a variety of other demand-side platforms are examples. Publishers, on the other hand, utilize specialized software known as SSPs or supply-side platforms to connect their inventory to ad exchanges to sell it. The phrase “supply side” refers to the fact that publishers have a supply of ad inventory on the ad exchange.

Because each ad exchange has different criteria, not all publishers can sell their inventory through ad exchanges. One of the most important criteria is the number of people who visit the website or app, which is referred to as traffic. A DSP, for example, may state that a publisher needs at least 10,000 visits or traffic per day to link their website to an ad exchange and sell their inventory.

Smaller publishers who don’t meet this traffic criteria partner with bigger companies called ad networks, which represent the inventory of all these small publishers together and sell the ad slots through ad exchanges for a commission. Examples of ad networks are GDN or Google Display Network and Facebook Partner Network.

The buying and selling of ad inventory via ad exchanges between publishers and advertisers can take place in three ways. The first is programmatic guaranteed, in which the advertiser requests a set amount of exposure in terms of how many times the ad will be displayed, which is referred to as impressions. It may be video views in the case of video. When the publisher agrees to this amount, they enter into a programmatic guarantee agreement.

As an example, Samsung may go to BBC.com and say they have a new phone launch campaign, and they want 1 million impressions on the website from this day to this date. If the BBC accepts, this is a programming guarantee contract. In other circumstances, the advertiser does not want to commit to a set number of impressions or views, so they agree to purchase and sell whenever the advertiser desires and the publisher maintains their ad spaces accessible for the advertiser to bid on and show advertising.

This form of transaction is known as a PMP, or private marketplace. In general, the advertiser makes these ad slots available to a large number of other advertisers and anticipates that at any given moment, one of these advertisers will bid on and purchase these slots. All publishers prefer to sell the majority of their inventory through programmatic guaranteed deals because it allows them to see how much of their inventory has already been sold and because the pricing for programmatic guaranteed deals is higher.

Publishers usually offer unused inventory packages to various advertisers if they are unable to sell through programmatic guaranteed arrangements. They make this inventory available to a set number of advertisers, such as five, ten, or twenty, and each advertiser must pay at least the minimum or floor price to purchase an ad slot.

This is known as a Private Marketplace or PMP transaction, and it entails sending a request for bid prices to advertisers anytime a visitor is on the website or app. Advertisers submit bid prices and the highest bidder is chosen via an ad auction procedure. All of this happens in real-time, which is why it’s called real-time bidding.

If the publisher still has some ad spaces available after selling through programmatic guaranteed deals and PMPs, this inventory is deemed low quality and is referred to as residual inventory. Publishers then turn to the third form of ad sale, an open auction. This implies that any advertiser utilizing a Demand-Side Platform (DSP) can purchase the ad slot, and there is no defined floor pricing. An open auction is so named because the publisher puts it open to any bidder.

Programmatic advertising is increasing its reach to include audio campaigns on podcasts and applications like Shopify, commercials on linked TVs like smart TVs and streaming apps like BBC or Roku TV, and digital out-of-home banners visible in malls and streets.

Advertisers report on crucial numbers, such as metrics and Key Performance Indicators (KPIs), to assess the amount and efficacy of the publisher and their inventory. These deliverables assist marketers in determining the performance of their advertising efforts.

Now, in most cases, billing and fees for purchasing and selling inventory are quantified via measures such as impressions, clicks, or installs. Impression rates are established for every thousand impressions, which is the most frequent billing metric. This is due to the cheap cost of a single imprint, which might complicate accounting. CPM, or cost per million, is the price for a thousand impressions. A CPM of six dollars, for example, indicates that the publisher charges six dollars for every thousand impressions.

CPC prices are often used, which implies the publisher costs for each click regardless of how many times the ad is shown. A two-dollar CPC means that the publisher will charge two dollars for each click on the advertiser’s adverts. It might also be CBD, which stands for cost per day, CPI, which stands for cost per install, or CPA, which stands for cost per acquisition. The charging model is entirely dependent on what is relevant to advertising.

Advertisers utilize engagement metrics to determine the effectiveness of a certain publisher or inventory for them. The number of people who found our adverts intriguing and engaged with them is shown by engagement metrics. CTR, or click-through rate, is used to measure display adverts. It is the proportion of individuals that clicked on the ad after seeing it. Similarly, video advertising is assessed using VTR, or view-through rate, which is the proportion of those who viewed the video after being shown it for the first time. The greater the CTR or VTR, the more appealing it is to advertisers.

Publishers got wiser over time as a result of this progress and awareness and produced ad formats that generate high engagement rates since they recognized it was vital for advertisers. The interstitial format, which occupies the entire screen and often occurs between stages of a game or the opening of an app, is regarded as one of the most engaging forms on mobile. Rich media is another high-impact advertising format. A rich media ad, by definition, is one that the user can engage with.

You may have seen adverts where you hover your mouse over the ad and it expands and becomes larger. In some circumstances, you may see an animation in an advertisement and be able to pause it, etc. The native advertisement format is another type that has a high interaction rate. A native ad, by definition, is designed to seem like a website’s natural content rather than a showy advertisement.

In general, publishers and marketers have been developing formats and tactics to boost these engagement rates. One of the most essential factors to consider when studying engagement rates is how impressions are calculated in programmatic advertising. If we have a long web page and an ad shows at the bottom of the page and the user never scrolls down, an impression for that specific ad will still be tallied, and the advertiser will be charged for it if it is a CPM-based arrangement.

Even if a web page is lengthy and an ad displays at the bottom, even if the user never scrolls down, an impression of that ad will be recorded. The advertiser will still have to pay for that impression if the arrangement is based on CPM. This is why marketers like to purchase inventory towards the top of the page, referred to as “above the fold” or ATF. The section of the page that shows below the fold and requires scrolling is referred to as “below the fold” or BTF.

We can now measure how many times an ad was shown to a user, regardless of whether it was above or below the fold, thanks to improved technology. This technique is known as “viewability,” and the number of times a person sees an ad is known as “viewable impressions.” These are the 45 principles explored in this video, with more to come next.