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How Programmatic Marketing Works

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by Tony Schubert, founder and CEO of Nerdigital Marketing

Ads form an integral part of an organization’s marketing efficiency. Some of the best forms of marketing include posting ads on websites. However, companies need to pay for this advertising space and many times a company may purchase some ad space which may not yield much. Programmatic marketing involves a computer automatically using data analytics to determine and buy the best digital advertising space for you and suggest how much to pay for the ad space. While the acronyms used in programmatic marketing make it sound like a complicated process, the truth is, it’s a very simple process.

The key to understanding programmatic marketing lies in understanding the language used in the process. The terminological acronyms used are DSP (demand supply side), SSP (supply side platform), DMP (data management platform), and API (application program interface). In simple terms, programmatic marketing involves buyers on one hand, sellers on the other end, and middlemen. Buyers use demand supply platform (DSP) to decide which ad space to buy whereas publishers use supply side platform to sell ad space by use of application program interface (API) to match them up in real time.

By allowing organizations a chance to critically evaluate a website, its activities, and the audience that visit the site, companies can find the perfect audience for their products and avoid spending on unyielding digital ad spaces. This article will explain how programmatic marketing works in three stages.

Finding ad space.

Usually, when a web page gets loaded and it has some space for ads, information about the browser page gets detected automatically and is sent to a publisher ad server. Artificial intelligence uses algorithms to know the website user or visitor’s behavior to determine the type of content that the website posts and the kind of audience it has. The publisher finds information about the web page through its data management platform (DMP). The information then gets sent to the publisher ad server to determine if there is an ad campaign that can match the website profile.

Vouching for buyers.

If an ad campaign is not immediately found to match the website’s profile, information gets sent to different platforms, including supply-side platform (SSP). The SSP then goes through the website’s user profile to determine if the website is legitimate, check the visitor behavior on the site, and only present the most relevant material in the next stage. After comprehensively evaluating and analyzing the ad space, the SSP sends out a request for bidders to multiple networks including traders, ad networks, and demand supply sides (DSPs), requesting them to bid for the ad space through an ad exchange

The bidding.

After the ad space gets advertised, the bid for it begins with organizations and individuals in the demand-supply side platforms evaluating the information about the website in relations to their target market to ascertain if they want the space. Companies use automatic algorithms to assess the request and analyze different features of the website about the product they are advertising and calculate how much they are willing to pay for the ad space according to their budget. After all assessments, bidders present their bids, the ad exchange selects the highest bidder, and then auctions the ad space to them. The winning bidder’s URL and price is sent to the publisher ad server which then lets the user browser website know which ad to display.

The browser website uses the provided URL to extract ads from the winner bidder to display on its ad space browser. The browser then displays the webpage of the winning bidder on its space, including matching ads.

 

tony schubert

Tony Schubert is the founder and CEO of Nerdigital Marketing. He strives to increase his knowledge in online marketing and build Nerdigital to a thriving small business marketing company. You can follow him on twitter at @nerdigitalmktg

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