[Video] What Is Programmatic Advertising?

4
at
4
minutes
Technical Level
September 29, 2021
Sharethrough
Contributing Authors & Industry Leaders
Ever wondered about the process behind the ads we see online? This process, called programmatic advertising, is a lot more complex than we think. We break it down in 4 minutes in the video below.

Ever wondered how many ads you see per day? In truth, we are exposed to hundreds of ads a day while browsing through content on our mobile phone, desktop, and our connected TV. These ads are carefully curated to target one single individual: you!

In fact, ads differ from person to person even when they are looking at the very same content simultaneously. So how do brands deliver targeted ads on thousands of websites and apps? We call this programmatic advertising. Let’s break it down...

Programmatic advertising connects publishers and brands in milliseconds, before the webpage has even loaded. You are browsing through tons of content on the internet every day - most of it free of charge! However, in order to provide quality content, some websites and apps (also known as publishers or content creators) need to generate revenue. To do so, they get help from Ad Exchanges, also known as SSPs or Supply-Side Platforms. But we’ll come back to that. Ultimately, brands want to reach internet users in order to promote their products and services. Their goal is to deliver targeted ads to their customers across the web, and they do so by purchasing advertising space. Brands must use DSPs, or Demand-side Platforms, to facilitate this transaction. DSPs are media platforms used by advertisers and agencies to set up their digital campaigns.

Let’s take a step back. Here’s what we’ve learned so far:

  • One, publishers use ad exchanges to monetize their advertising inventory.
  • Two, advertisers use DSPs to configure and deliver their digital campaigns.

For example, Joe is eager to check out the results of the soccer game. Using a search engine, he clicks on one of the results, loading a webpage. What Joe doesn’t know is that while this page is loading, a ton of stuff is happening in the background that he cannot see... The website has dedicated space on the page to serve ads to users, and they must send a request to ad exchanges in order to get the best price. The ad exchange in turn creates an ad request with information such as device type, the URL, IP address, category, cookies, and more! Once it's packaged, the ad request is sent to DSPs. This is where the brands come in! While the DSP is receiving the request from the ad exchange, brands have already predetermined their campaign creatives, targeting criteria and bidding price in the platform. If there’s a match, the DSP submits their bids to the ad exchange. The exchange validates all the bids by verifying publisher rules, scanning for malware, and finally, chooses the winning bid. Once the winning bid is selected, it travels straight to the publisher alongside the other bids. The publisher then makes the final decision and picks a winning bid leveraging its own advertising software. Now it’s time for the ad exchange to render the ad onto the page. At this point, Joe can see both the publisher’s content and the ad on the page, and can choose whether or not to engage with it.

In a nutshell, the programmatic advertising ecosystem uses automated technologies to buy and sell digital inventory across thousands of websites and apps. In fact, the entire process occurs in less than 400 milliseconds! Publishers leverage ad exchanges to monetize their inventory, while advertisers leverage DSPs to run their campaigns. On top of this, the possibilities for creative formats are endless, bringing advertising campaigns to life through display, video, native and CTV. Thanks to programmatic advertising, Joe is able to access curated content almost everywhere, whether he is on his computer, TV, phone, and even on a digital billboard he passes by on his way to work!

Ever wondered about the process behind the ads we see online? This process, called programmatic advertising, is a lot more complex than we think. We break it down in 4 minutes in the video below.

Ever wondered how many ads you see per day? In truth, we are exposed to hundreds of ads a day while browsing through content on our mobile phone, desktop, and our connected TV. These ads are carefully curated to target one single individual: you!

In fact, ads differ from person to person even when they are looking at the very same content simultaneously. So how do brands deliver targeted ads on thousands of websites and apps? We call this programmatic advertising. Let’s break it down...

Programmatic advertising connects publishers and brands in milliseconds, before the webpage has even loaded. You are browsing through tons of content on the internet every day - most of it free of charge! However, in order to provide quality content, some websites and apps (also known as publishers or content creators) need to generate revenue. To do so, they get help from Ad Exchanges, also known as SSPs or Supply-Side Platforms. But we’ll come back to that. Ultimately, brands want to reach internet users in order to promote their products and services. Their goal is to deliver targeted ads to their customers across the web, and they do so by purchasing advertising space. Brands must use DSPs, or Demand-side Platforms, to facilitate this transaction. DSPs are media platforms used by advertisers and agencies to set up their digital campaigns.

Let’s take a step back. Here’s what we’ve learned so far:

  • One, publishers use ad exchanges to monetize their advertising inventory.
  • Two, advertisers use DSPs to configure and deliver their digital campaigns.

For example, Joe is eager to check out the results of the soccer game. Using a search engine, he clicks on one of the results, loading a webpage. What Joe doesn’t know is that while this page is loading, a ton of stuff is happening in the background that he cannot see... The website has dedicated space on the page to serve ads to users, and they must send a request to ad exchanges in order to get the best price. The ad exchange in turn creates an ad request with information such as device type, the URL, IP address, category, cookies, and more! Once it's packaged, the ad request is sent to DSPs. This is where the brands come in! While the DSP is receiving the request from the ad exchange, brands have already predetermined their campaign creatives, targeting criteria and bidding price in the platform. If there’s a match, the DSP submits their bids to the ad exchange. The exchange validates all the bids by verifying publisher rules, scanning for malware, and finally, chooses the winning bid. Once the winning bid is selected, it travels straight to the publisher alongside the other bids. The publisher then makes the final decision and picks a winning bid leveraging its own advertising software. Now it’s time for the ad exchange to render the ad onto the page. At this point, Joe can see both the publisher’s content and the ad on the page, and can choose whether or not to engage with it.

In a nutshell, the programmatic advertising ecosystem uses automated technologies to buy and sell digital inventory across thousands of websites and apps. In fact, the entire process occurs in less than 400 milliseconds! Publishers leverage ad exchanges to monetize their inventory, while advertisers leverage DSPs to run their campaigns. On top of this, the possibilities for creative formats are endless, bringing advertising campaigns to life through display, video, native and CTV. Thanks to programmatic advertising, Joe is able to access curated content almost everywhere, whether he is on his computer, TV, phone, and even on a digital billboard he passes by on his way to work!

No items found.
About Behind Headlines: 180 Seconds in Ad Tech—

Behind Headlines: 180 Seconds in Ad Tech is a short 3-minute podcast exploring the news in the digital advertising industry. Ad tech is a fast-growing industry with many updates happening daily. As it can be hard for most to keep up with the latest news, the Sharethrough team wanted to create an audio series compiling notable mentions each week.

Ever wondered about the process behind the ads we see online? This process, called programmatic advertising, is a lot more complex than we think. We break it down in 4 minutes in the video below.

Ever wondered how many ads you see per day? In truth, we are exposed to hundreds of ads a day while browsing through content on our mobile phone, desktop, and our connected TV. These ads are carefully curated to target one single individual: you!

In fact, ads differ from person to person even when they are looking at the very same content simultaneously. So how do brands deliver targeted ads on thousands of websites and apps? We call this programmatic advertising. Let’s break it down...

Programmatic advertising connects publishers and brands in milliseconds, before the webpage has even loaded. You are browsing through tons of content on the internet every day - most of it free of charge! However, in order to provide quality content, some websites and apps (also known as publishers or content creators) need to generate revenue. To do so, they get help from Ad Exchanges, also known as SSPs or Supply-Side Platforms. But we’ll come back to that. Ultimately, brands want to reach internet users in order to promote their products and services. Their goal is to deliver targeted ads to their customers across the web, and they do so by purchasing advertising space. Brands must use DSPs, or Demand-side Platforms, to facilitate this transaction. DSPs are media platforms used by advertisers and agencies to set up their digital campaigns.

Let’s take a step back. Here’s what we’ve learned so far:

  • One, publishers use ad exchanges to monetize their advertising inventory.
  • Two, advertisers use DSPs to configure and deliver their digital campaigns.

For example, Joe is eager to check out the results of the soccer game. Using a search engine, he clicks on one of the results, loading a webpage. What Joe doesn’t know is that while this page is loading, a ton of stuff is happening in the background that he cannot see... The website has dedicated space on the page to serve ads to users, and they must send a request to ad exchanges in order to get the best price. The ad exchange in turn creates an ad request with information such as device type, the URL, IP address, category, cookies, and more! Once it's packaged, the ad request is sent to DSPs. This is where the brands come in! While the DSP is receiving the request from the ad exchange, brands have already predetermined their campaign creatives, targeting criteria and bidding price in the platform. If there’s a match, the DSP submits their bids to the ad exchange. The exchange validates all the bids by verifying publisher rules, scanning for malware, and finally, chooses the winning bid. Once the winning bid is selected, it travels straight to the publisher alongside the other bids. The publisher then makes the final decision and picks a winning bid leveraging its own advertising software. Now it’s time for the ad exchange to render the ad onto the page. At this point, Joe can see both the publisher’s content and the ad on the page, and can choose whether or not to engage with it.

In a nutshell, the programmatic advertising ecosystem uses automated technologies to buy and sell digital inventory across thousands of websites and apps. In fact, the entire process occurs in less than 400 milliseconds! Publishers leverage ad exchanges to monetize their inventory, while advertisers leverage DSPs to run their campaigns. On top of this, the possibilities for creative formats are endless, bringing advertising campaigns to life through display, video, native and CTV. Thanks to programmatic advertising, Joe is able to access curated content almost everywhere, whether he is on his computer, TV, phone, and even on a digital billboard he passes by on his way to work!

About Calibrate—

Founded in 2015, Calibrate is a yearly conference for new engineering managers hosted by seasoned engineering managers. The experience level of the speakers ranges from newcomers all the way through senior engineering leaders with over twenty years of experience in the field. Each speaker is greatly concerned about the craft of engineering management. Organized and hosted by Sharethrough, it was conducted yearly in September, from 2015-2019 in San Francisco, California.

Listen to Next—
3:00
August 13, 2021
Behind Headlines: 180 Seconds in Ad Tech — Fraud in CTV & Focus on Privacy
This week in Behind Headlines: 180 Seconds in Ad Tech we’re covering acquisitions, CTV fraud, privacy sandbox updates, and a new DSP launch.
3:00
August 6, 2021
Behind Headlines: 180 Seconds in Ad Tech — The Metaverse & Google Under Fire
This week in Behind Headlines: 180 we're covering the Metaverse, Google's antitrust suit, streaming viewership and new ad formats.
3:00
July 30, 2021
Behind Headlines: 180 Seconds in Ad Tech — CTV Deals & Platform Safety For Users
This week in Behind Headlines: 180 Seconds in Ad Tech we’re focusing on CTV, IPOs, platform safety and privacy sandbox updates.
Watch Next—
3:00
July 2, 2021
Behind Headlines: 180 Seconds in Ad Tech — Delayed Cookies & Investments
This week in Behind Headlines: 180 Seconds in Ad Tech we’re talking about the delay in the depreciation of third-party cookies & news on IPOs.
3:00
June 25, 2021
Behind Headlines: 180 Seconds in Ad Tech — Power Plays & Privacy
This week in Behind Headlines: 180 Seconds in Ad Tech we’re taking a look at the role of competition and key player’s growing dominance.
3:00
June 18 2021
Behind Headlines: 180 Seconds in Ad Tech — Lawsuits & Set Backs In Addressability
This week in Behind Headlines: 180 Seconds in Ad Tech we’re talking about the rise in privacy and addressability, from lawsuits to setbacks.
Sharethrough
Contributing Authors & Industry Leaders

About the Author

Sharethrough is made up of inspired forward-thinkers with first hand knowledge of the industry, who support the business & help the company flourish.

More from this author