Programmatic advertising is still a very elusive topic to most marketers. Only 25% of surveyed marketers in the US really know how programmatic works even if it is widely used today. Succinctly, programmatic advertising automates the process of buying and selling ad inventory. Using technology, it targets ads to the right audience efficiently, removing the need for manual decision-making. Programmatic adoption is still on the rise with an approximate $778Bn to be spent on programmatic advertising in 2028.
For an advertiser to show an ad to a user on a publisher’s website it needs to go through multiple stakeholders and steps. The most advanced part of programmatic is called Real-Time Bidding (RTB), it’s a process in which the decision for an advertising to show an ad on a publisher’s website goes through a real-time auction in which the highest bidder amongst a plethora of advertiser wins the right to show an ad in a dedicated placement. This whole process takes less than 100 milliseconds.
In the below diagram, we listed all the stakeholders responsible for the showing of an ad in a specific publisher ad placement.
Let’s go over some of them:
A demand-side platform is an ad tech platform made for buying ad traffic programmatically, as well as creating, managing, and optimizing advertising campaigns. The DSP is the advertiser platform to create campaigns, upload creatives and catalogs and make sure the whole ad tracking system works.
DSPs can see major changes as AI can largely benefit DSP in the realm of account structure optimization and recommendation. DSPs still receive human input in campaign creation, audience selection and goal settings. I very often see campaigns that are inefficiently structured and misaligned with companies’ goals leaving huge room for improvement.
A supply-side platform is an automated ad tech platform that publishers use to manage, sell, and optimize ad inventory of their mobile apps or websites. Consider this as the platform for publishers to optimize the revenue and content they show through advertising.
A customer data platform is an advanced customer data management software solution consisting of a centralized database with the ability to ingest, integrate, manage, and deliver customer first-party data to other technology solutions and more notably advertising solutions in order to personalize the customer experience at scale. CDP creates a unified customer profile with a known name, company, email, etc. CDP collects these attributes from web and mobile analytics tools, CRM, transactional systems, subscriptions and newsletter signups.
In essence, a data management platform is a technology used for gathering and managing data. DMPs store third-party data, which helps to build anonymized user profiles and share them with other parts of the ad tech stack.
Customer relationship management is a system for managing all of your company's interactions with current and potential customers.
Digital Out-of-Home (DOOH) Advertising: Leveraging mobile location data, DOOH bridges online and offline ad channels by showing ads on physical spaces in the street connected to programmatic networks, enhancing user experience and boosting offline conversions.
Growth in Programmatic TV, Podcasts, and Audio: As audiences shift from cable to OTT services like Netflix and Amazon Prime, advertisers utilize programmatic strategies for both channels. Netflix, Hulu and Prime all offer their Connected TV programmatic DSP to advertisers now. Data-driven programmatic TV becomes crucial as multimedia content consumption spans mobile and internet-connected TVs.
AI: AI are revolutionizing ad tech by analyzing vast data sets, predicting user behavior, and optimizing ad placement. This bridges the online identity gap and boosts ad effectiveness and reduces customer acquisition costs by aligning ad delivery with user data insights.
Retail Media: Retail media is a type of digital advertising that presents brands with ways to promote their products or services within a retailer’s e-commerce platform or physical store. This technique involves the use of targeted advertisements and sponsored content that is displayed to shoppers while they browse and make purchases. It is quickly gaining popularity due to its ability to provide brands with great targeted advertising opportunities while also enabling retailers to tap into a new revenue stream. It’s expected to reach $160Bn dollar market (20% of programmatic dollar expenditure).
