Programmatic advertising uses technology to automate media buying: Advertisers bid in real-time to reach a specific audience, and the highest bidder wins the ad impressions that are up for auction—i.e., the winner's ads are served on a publisher's website.
That real-time-bidding (RTB) process takes a mere 100 milliseconds!
The programmatic advertising process involves various participants and ad technologies: advertisers and publishers, advertising exchanges, data management platforms (DMPs), demand-side platforms (DSPs), supply-side platforms (SSPs), and consent-management platforms (CMPs).
Ad exchanges are platforms that mediate between publishers who sell ad space (inventory), and advertisers, who bid to buy that inventory. Exchanges connect the parties to one another and assess the price and the quality of the ad impressions (based on the quality of the website or webpage where the ads would appear).
DMPs support the targeting of ads. They do so by analyzing, categorizing, and otherwise organizing bid requests as well as data from websites (desktop and mobile), mobile apps, analytics, social media, and offline sources.
DSPs help advertisers buy ad inventory by placing a bid for a publisher's inventory of impressions if its profile matches the behavioral and personal data of the audience being targeted by the advertiser. SSPs help site publishers manage and sell their ad inventory; they use CMPs to manage user consent within industry and regulatory frameworks.
An infographic from Epom, provider of an ad management platform for cross-channel advertising, outlines the process, benefits, challenges, and the current state of programmatic. Check it out:
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