Programmatic Advertising

Which stakeholders play a role in Programmatic Advertising?

Before talking about the roles in programmatic advertising, we need to divide the process into the supply side and the demand side. On the demand side we have the agenciesand the Demand-Side-Platform (DSP)and on the supply side we have the marketerand the Sell-Side-Platform(SSP). These two sides are connected by an adserver and a Data-Management-Platform (DMP).

Let us take a look at which roles these stakeholders play in the process of programmatic advertising. We will start by checking out the demand side followed up by the supply side and the stakeholders which bring them together.

Agencies: The agencies provide the budget and the advertising medium to their client.  By that, advertising contacts can be bought automatically in order to partake in programmatic advertising.

DSP: A Demand-Side-Platform is used by the agencies to automatically buy advertising contacts. Also is is used to place their client’s ads on websites. To evaluate which website is the best to reach their clients target group, a DSP rates websites based on data and values. Well-known DSP providers are for example DBM, Tradedesk or Appnexus.

Marketers: On the supply side we have the marketers in the process of programmatic advertising. They provide spaces for advertisements on their website and sell it to agencies.

SSP: A Sell-Side-Platform is used by the marketers to auction off their spaces for advertisements. For example, Popular SSP’s are Google Ad X, Rubicom or Yieldlad.

DMP: The Data-Management-Platform is the “heart” of the programmatic advertising process. Cookies are stored on this platform to create user profiles which agencies, DSP’s and publisher access to provide their target group the fitting advertisement.

Adservers: Adservers have the function to control, supply and track the advertising in the process of programmatic advertising.


How does “Programmatic Advertising” work?

Following up from before, we may have already heard that programmatic advertising has something to do with auctioning off spaces for advertising on websites. Next, we will have a quick play by play on what this may look like.

  1. A user clicks on a website and it starts to build up.
  2. The SSP sends out a signal to a variety of DSP’s reporting that it needs advertising to imply on the website.
  3. The DSP checks if the user is interesting to their client. If so, the DSP sends out a bid with which it wants to win the auction.
  4. The highest bidder wins the auction and pays accordingly to the “Second-Price-Auction-Principle”, means he has to pay one cent more than the second highest bidder. This whole process takes place in just half a second.
  5. The advertisement of the highest bidder is showcased to the user.

This is how a process in programmatic advertisement could look like.