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It’s estimated that programmatic advertising will


   grow at an unprecedented speed of over 30% in 2017 alone. Not only is this channel growing at a faster rate than any other within the digital industry, it’s also completely dominating the market. With spending set to reach heights of over $60 billion in 2018, it’s safe to that programmatic ads are here to stay. Today I’m going to help you decrypt this area of digital advertising and educate you on every aspect of programmatic.

  pROGRAMMATIC ADVERTISING DEFINITION: WHAT IS IT?

  The programmatic advertising meaning includes the following: The process of using technology to buy and sell ad inventory through an automated and data-driven procedure. It also represents most types of ad spaces on all screens including video, mobile, native and display ads. The term gets used a lot within the digital advertising industry and often relates to areas such as real-time bidding (RTB), remnant inventory and open auctions.

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  programmatic advertising is a unique and complicated beast. It requires a huge investment of time and resources to really capitalize. If you’d like to learn how your business could employ a more lucrative ad optimization strategy, contact us to book a free consultation.

  HOW IT GOT STARTED: A BRIEF HISTORY

  what is programmatic advertising 101 explained

  Before we get into the technical details, it’s best to show you how programmatic got started in the first place.

  Let’s rewind back to the early stages of the internet. Buying an ad space online was a much simpler process than it is today. It originally started with a relationship between publishers and advertisers.

  The advertiser is also known as the buyer and the publisher as the seller.

  The goal of the Advertiser normally was to reach their target market or audience and to influence them to perform some action. This action could be to make a purchase, build brand awareness, promote an event, etc.

  The goal of the publisher was to build a web property that contained intriguing, entertaining and useful content to attract an audience the advertiser would want to reach with their marketing campaigns.

  Agencies then started helping advertisers to achieve their marketing goals and communicate with their target audience. It was the job of media planners to create media plans to target the right audiences and subsequently to communicate with the publishers that had access to those audiences. However, the internet started to grow at an unprecedented rate, and a massive oversupply existed.

  It resulted in a lot of ad inventory left unsold and not being monetized. publishers grew at a much quicker rate than advertisers and it was getting harder for advertisers to consume the supply available to them.

  Next, a new group within the advertising ecosystem emerged and called themselves Ad Networks. What this group did was categorize a publisher’s unsold ad inventory making it easy for media planners to consume, access and include it within their media campaigns.

  It resulted in online media evolving into premium and remnant ad inventories. premium ad inventories were sold the original way with a direct relationship between advertisers and publishers. Remnant ad inventories were the unsold or leftover ad space of a publisher that got sold through ad networks.

  This meant that agencies had more than one channel to source ad inventories for their advertising partners. This video explains it in a similar manner.

  With this new development, the selling process became more complicated for publishers, and they had to find a way to manage who was gaining access to their inventory for resale to agencies and advertisers. That is how an SSp or Supply Side platform was invented.

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  An SSp helps publishers maximize their revenue earned through ad networks by acting as a layer between publishers and third-party advertising networks. Supply Side platforms give publishers control over their ad inventory and help them dictate how it is sold and delivered to ad networks. With SSp’s, a bidding environment was created to help publishers extract the most revenue possible for their ad inventories.

  At the other end of the spectrum, DSp’s or Demand Side platforms started to emerge to assist agencies and advertisers with the buying side. A DSp is defined as an infrastructure that enables advertisers and agencies (buyers) to manage their media buying via a single platform.

  DSp’s and SSp’s developed and improved their technology leading to an infrastructure integrating both platforms and allowing buyers and sellers to perform programmatics with real-time bidding or RTB.

  Using all these automated and data-driven techniques resulted in a programmatic way to buy and sell digital media. Which created the term programmatic to categorize the industry.

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