A beginner’s guide to the intriguing wonderland of advertising technology — Part 2
Suggested prior reading: Part 1
Q. Who gives lousy examples of Romeo and Juliet? And the media buying process seems like a fairly simple transaction between two parties. Why is the advertising landscape so big then?
A. I just unwittingly try to be witty — my apologies. Anyway, the media buying process is still a transaction between two parties. All the other entities have come up solely to optimize the process of ad buying. Let’s hit them up, one at a time.
THIRD PARTY AD NETWORKS
With the expansion of the internet, the publishers and thus ad inventory grew at a much faster rate than the demand of ads. This resulted in supply exceeding the demand and some inventory began going unsold. Thus came Ad Networks. These ad networks collected and categorized the unsold inventory.
Thus, the premium inventory was sold directly to the advertisers and the unsold inventory was sold to ad networks.
How ad networks work: Publishers can send their ad slots to ad networks quoting a minimum value that they expect. The advertisers can see these ad slots and can buy/bid for them according to the money that they are willing to pay. Networks can also help buyers target a specific audience (since they have the information of the web page topic as well as the demographics and the preferences of the people viewing them). Ad networks also handle transactions and can also give you metrics about how the ads performed and how they were charged.
The app you created isn’t getting ads on it? William suggests using an ad network.
Some leading ad networks are AdSense, DFP (DoubleClick for Publishers), OpenX, Adzerk, Zedo
Q. There is lot of talk about Real Time Bidding? Does it mean exactly what I’m thinking it does?
A. Absolutely. Inventory these days is being sold in real time. Why, you ask? It’s because of the need to be adaptable to the ever changing behavioral trends displayed by the end user.
For example, when Romeo searched for dumb-bells on Amazon.com, his browser passed information to the ad exchange through a cookie - that this person with this browser instance ID searched for dumb-bells. Thus whenever he would visit the next site with an ad slot, Amazon.com or someone else, who might sell dumb-bells, will bid higher for that slot at that time at the ad exchange than Netflix who wants Romeo to watch The Witcher.
AD EXCHANGES
Yes, I have used this term often without mentioning what it is. Here goes…
Ad exchanges are nothing but digital marketplaces where inventory is bought and sold online. Sometimes advertisers buy inventory from an ad exchange through a DSP, sometimes ad networks buy it and then make it accessible to the DSPs. (DSPs?? Wait up a little!)
Some leading ad exchanges are AppNexus, AOL’s Marketplace, Index Exchange, OpenX and Rubicon Project.
Q. Why do I feel Ad Networks and Ad Exchanges are synonyms? Are they?
A. No. They aren’t. Ad Networks’ primary job is to collect and segregate/categorize the unsold inventory from the publishers and then sell it to the buyers for the best possible value. They might not be very transparent to other market rates. Ad Exchanges, on the other hand, are marketplaces for real time bidding which are much more transparent.
THIRD PARTY AUDIENCE NETWORKS
They focused more on the WHO against ad networks which focused on the WHAT (since they have the information of the web page topic as well as the demographics and the preferences of the people viewing them). Buyers can buy audience through audience networks independent of the content.
Through an audience network, you get to target Romeo not only for gyms, but for the latest mobile phones, youth programs and entry level career certifications.
The leading audience network is Facebook Audience Network
SUPPLY SIDE PLATFORMS (SSPs)
As the programmatic buying universe grew, new players emerged in the market to streamline and optimize the media buying process. Two of the cornerstone entities are SSPs and DSPs.
For the publishers, managing one to one transactions to each advertiser became a cumbersome process. Clearly, there was a need for a solution to sell inventory hassle-free and in a scalable fashion. In came SSPs.
SSP is a platform where publishers connect to, to list their ad inventories. They also work as ad-exchange. SSPs look to maximize the amount for which the inventory gets sold.
How SSPs work: First, the SSP considers the publisher’s essential condition — a minimum price for which they are willing to sell an ad space, or a potential impression. It then sends out information about the user on the page and starts collecting information from DSPs. Once it was several of these offers, it accepts the one with the highest price. Consider SSPs as RTB servers.
Some SSPs which are doing great: Google Ad Manager, MoPub, AppNexus Marketplace, AerServ, BounceX, OpenX, PubMatic
DEMAND SIDE PLATFORMS (DSPs)
The advertisers perhaps saw the sellers enjoying a bit of better ROI on their selling process, thanks to SSPs. “We need lawyers of our own”. Voila! DSPs have arrived. (Please ignore, it’s made up).
A DSP is a centralized buying platform for advertisers/agencies to access ad inventory across digital environments. (Can access about 85% of all inventory, capabilities, audience data etc.)
How DSPs work: DSPs collect different kind of data beforehand from advertisers/agencies regarding what ad slots they are looking for e.g. :
1. Budget of the campaign
2. The audience which will be targeted
3. The kind of websites that will be targeted
Based on these things, a DSP checks out all the ad slots put up by the SSPs and submits the highest bid it can, after optimizing all the above parameters. DSPs have their own internal optimizing algorithms, perhaps inspired from linear regression techniques. Knowing how SSPs work, if the bid submitted by the DSP is higher than others competing, the advertiser wins the right to advertise on that slot. The DSPs help enable programmatic buying and thus save a lot of time and effort for the buyers. Consider DSPs as RTB clients.
Popular DSPs include DoubleClick Bid Manager, RocketFuel, BrightRoll, MediaMath, Turn.
AGENCY TRADING DESKS (ATDs)
When the DSPs and SSPs started maturing into the process, the pricing was taken care of. The focus now shifted on accuracy and quality of campaign performance. Often times gaps were seen in which sets of users were eventually targeted and low conversion rates were looked into. Le another set of enterprises appears…
Agency trading desks possess domain knowledge and help the advertising agencies in contextual targeting, planning, execution, reporting, analytics and optimization of the campaigns through employment of expert staff. When the advertiser is unsure about reaching out to a new market or having a consistently low conversion rate, an ATD might help them.
Some great ATDs are Xaxis, Accuen, VivaKi and Cadreon.
DATA MANAGEMENT PLATFORMS (DMPs)
We have seen that DSPs have dealt with customer data for targeting. But it’s all unorganized and there is a problem of extra spend of budget.
For obvious reasons, William wants worth for every penny he puts in. He wants to make sure that if he’s put £5000 in the advertising campaign, more and more Romeos should be able to see the creative. But for that, he needs more information in an organized format about where his past campaign was shown and let’s say what are the personality traits of the people he wants target in future. In springs a DMP.
DMPs are responsible for importing and unifying all the customer data in a single view. What kind of customer data? Browsing history, past purchases, consumer data, partner data, 3rd party data (given the user consented to it, *wink*). Thus, it helps in customer profiling, which can be used by other entities in the landscape for targeted marketing. DMPs also give the advertisers a universal insight into how their campaigns are performing among different sets of audiences.
Some leading DMPs are Adobe, Oracle, Nielsen, Krux, Experian
Q. That’s a hell lot of information. But how are ads really displayed? How does it work under the hood?
A. You need to know about ad serving. Click here.
Note: Note: The interpretations are my own. The facts and definitions are inspired from publicly available ad-tech educational content by Google, Bizo, Digiday, Infinitive and BrillMedia.co
