A Beginner’s Guide to Programmatic Advertising
Just about everyone getting their start in the digital advertising industry has a run in with the infamous Display LUMAscape graphic.
Yes, it’s tough to make heads or tails of this. But it indicates a larger, inherent problem with the industry: no one really knows what’s going on.
So, we decided to take a stab at making it a little easier to digest with a beginner’s guide to programmatic advertising:
OK, this is a lot simpler, but it’s still a little hard to wrap your head around. Let’s dive in a little deeper.
Also known as marketer side, demand side or buy side.
Advertisers hire advertising agencies (or build out in-house teams) to craft their message and get it out into the world. This is done by creating campaigns and buying media inventory to put those campaigns in front of people.
Agencies or in-house teams will sometimes hire trading desks to manage media buys. Trading desks typically sit atop licensed Demand Side Platforms (hang with us) as a service that works closely with — sometimes within — agency/in-house teams.
Demand Side Platforms (DSPs) allow agencies/in-house teams (or their trading desk) to buy ad placements in real time. They essentially sell media inventory to agencies or in-house teams.
Creative Optimization technology allows agencies/in-house teams to generate and optimize ads based on real-time data.
Retargeting technology uses tracking data to identify users that have already visited, for example, a landing page set up by the agency/in-house team. These users then get targeted with ads based on their behavior on the landing page.
Media Planning & Attribution
Media planning technology helps agencies/in-house teams (or their trading desks) plan their media mix. They figure out what ads goes where, when and why.
Attribution technology answers the question of what leads users to action. This informs media planning quite a bit and includes categories like call attribution (what ad did they see that got them to call?), location attribution (what ads drove foot-traffic?), multi-touch attribution (what touch-points did the user see before converting?), etc.
Ad servers make instantaneous decisions to determine which ads are served. This is the technology that actually places the ad in front of the user.
Middle Men & Others
Tags track user behavior and inform Media Planning & Attribution, Retargeting, and others. There can be a lot depending on the campaign, so tag management technology comes in to sort it all out.
DMPs and Data Aggregators
Data Management Platforms (DMPs) are basically data warehouses. They’re platforms dedicated to ingesting, aggregating and presenting raw data in a way that’s useful for advertisers, publishers and just about anyone else.
The companies that collect data and sell it. Pretty straightforward (for once).
Measurement & Analytics
Analytics companies are solely dedicated to tracking metrics and performance. This includes companies like Nielsen, who defined TV ratings back in the day.
Verification & Privacy
Companies that specialize in verification help minimize fraud, protect user privacy, and provide a third-party, unbiased view of metrics.
Media Management Systems & Operations
These are companies that specialize in helping others navigate this whole ecosystem. This includes media planning tools, media deployment, aggregating data from all other categories, consultation on scaling teams and more.
Also known as supply side.
Exchanges facilitate the buying and selling of media inventory. They manage the complicated bidding processes that determine which ads go where.
Ad networks aggregate and package inventory from publishers and help them monetize content.
Supply Side Platforms (SSPs) give publishers a central place to host their inventory and receive revenue. DSPs help agencies buy, SSPs help publishers sell.
Ad servers make inventory available to sell through ad networks. It’s what publishers use (sometimes facilitated by SSPs) to manage where, when and how their inventory shows up.
All of this is an attempt at dividing one big constantly shifting soupy grey area into clear-cut categories. There is a ton of cross-pollination and consolidation that complicates this all on a daily basis.
This volatility has a massive impact on everything from innovation to performance to ROAS.
Anyone who lives knee-deep in the industry day in and day out will tell you: there is a lot of nuance missing here. Any guide to programmatic advertising will have to gloss over a bunch of things.
If you’d like to get up to speed, subscribe below or drop us a line and we’ll help unpack it all.
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