A beginner’s guide to the intriguing wonderland of advertising technology — Part 1
It’s 1589. Romeo wants to lose weight. He has been fancying the girl living across the street, Juliet, for a while now (Outdated idea? Check the year again). But clearly, he needs someone to guide him. One day, as he unsuccessfully tries to run another mile without over-cramping his legs, he comes across a roadside skit. It looks like a bunch of ridiculously physically fit people singing songs about how this guy — William — helped them transform their physical self and changed their life. They seem genuinely happy. Romeo is instantly struck, as he visualizes himself being fit as much. He sees his problems and insecurities solved. The skit seems to be doing its job.
The advertising industry is an ever-evolving market. Right from word of mouth in the medieval times to paper fliers in the 20th century to interstitial digital ads in 2020, advertising has always been important and relevant to each era. This is also exactly why businesses are focused towards efficient advertising and new technology is heavily being invested to innovate more in this field.
If you deal with advertising technology (lovingly called ad-tech), it only seems fit to have basic working knowledge of what the current landscape is. This write-up is an amateur attempt to make the reader understand — who and what all work behind the ads they see on their phones — in one reading, hopefully.
ADVERTISERS
Advertisers are people or businesses who want to market their products or services. This could be anything or anyone: Coke, Netflix, Dell, Johnnie Walker, Donald Trump (Oops!).
ADVERTISING AGENCIES
Businesses which want to advertise, need to focus on what they do best — create their product or provide their service. This gave rise to a new string of firms, which would handle the ad campaign planning, execution and optimization for the advertisers, known as Advertising Agencies.
The biggest names in advertising agencies are WPP, Omnicom, Publicis Groupe and IPG.
PUBLISHERS (OR SUPPLIERS)
These are the business who have a product (typically a form of media) used by the masses. These are the platforms which hold potential ad slots (also called as ad inventory).
A 1981 Romeo perhaps saw a gymnasium ad in Daily Mail. His 2004 counterpart watched a TV commercial on Telebrands. The contemporary 2020 Romeo was probably watching a video on “How to lose weight without going to gym” on YouTube (sigh!) and this ad played right there before the video started playing.
THE DIRECT MEDIA BUYING PROCESS
As it must be clear by now, the advertisers or the agencies (hereafter collectively referred to as advertisers) need to buy ad space from the publishers. The simplest method to do this is to directly contact the publisher and place an order for an ad running for x number of times. Indeed, this is how the conventional media advertising and even internet advertising (for the initial part) worked. This process is called direct buying and the directly bought ad slot is called premium inventory.
William perhaps knew Romeo and similar people would heavily watch YouTube. He got his video ad made and placed an order of running this ad 1000 times by youngsters in their mid-20s.
THE PROGRAMMATIC MEDIA BUYING PROCESS
As the internet and technology grew, the Need For Speed in advertising became paramount (EA owes me some money here!). Direct buying was slow and based on manual estimate of the market rate of the inventory. The technologists envisioned that ad slots could also be bought automatically via computer systems (in fancier terms, programmatically). All the buyers needed to specify to the publishers was the ad campaign details, who they want to target and how much they are willing to bid for it. This process is called programmatic buying.
Q. All this seems very clear to me, but I keep seeing this infographic having this seemingly complex flow and confusing entities like DSP, SSP, Adservers, DMP, Trading Desks etc. What about those?
A. Clever gimmick of marketing my second post in this series: Part 2 (click).
Note: The interpretations are my own. The facts and definitions are inspired from publicly available ad-tech educational content by Google, Bizo, Infinitive and BrillMedia.co
