Advertisement Tech — Components and Concepts.
There are many cogs in the wheel in the Adtech ecosystem with their indispensable functionalities as depicted in the diagram below. The terms may seem intimidating at first, but you’ll get hang of it slowly. I have also pasted a video link towards the end that’ll put things in perspective.
Let’s start with the most basic components, the advertisers, and the publishers. Advertisers can be brands like Starbucks, who want your desperate attention so that you spend your hard-earned money on purchasing their well-thought-of product. Publishers are, for example, websites, on which they can show those creative advertisements (that they’ve hired ad agencies for).
1. Publishers:
Publishers provide ad spaces on their websites, like facebook.com or google.com to monetize their inventories.
2. Ad inventories:
Ad space on websites.
3. Ad agency:
A business dedicated to creating, handling advertising, and handles marketing promotions.
Let’s reserve the number system only for difficult technical terms. Now, as you see in the top-most diagram, advertisers and publishers form the far-ends of the ecosystem. Since brands like Starbucks have more important things to focus on, like building a product and keeping it alive and kicking in the market than to get into the engineering aspects of reaching the right set of audiences seamlessly, they get by a little help from the likes of DSPs and Agencies. Similarly, SSPs form the gateways for publishers into the ecosystem. Now, we have both parties ready for price negotiations, and we need an unbiased mediator to carry out these exchanges. This is where the funny-looking shapes in the diagram above come to the rescue, an Ad-exchange, and an Ad-network.
4. DSP:
Demand-side-platform. A tech platform that enables buyers(advertisers) to evaluate and bid for online media(ad space on publishers) through an Ad exchange. It allows advertisers, working at brands and ad agencies to buy ad space on an impression-by-impression basis from publishers via supply-side platforms (SSPs) and ad exchanges via real-time bidding (RTB). Some of the unmissable DSPs are Facebook Ad Manager, Liveramp, and DoubleClick (owned by Google).
5. Ad impression:
When an advertisement or any other form of digital media renders on a user’s screen, they are referred to as impressions.
6. SSP:
Supply-side-platform. Technology that aids publishers optimize their ad inventories through ad exchanges and ad networks. The technology platform that enables the selling of the empty space you encounter when you visit a website on the right. Pubmatic, Google Ad Manager, and AppNexus are some to name a few.
7. Ad exchange:
An online auction marketplace that facilitates buying and selling of inventory across multiple ad networks and demand-side platforms. An ad exchange is a big pool of impressions. Publishers tip their ad impressions into the pool hoping someone will buy them. Buyers, such as Advertisers directly or indirectly through DSPs or Ad networks then pick which impressions they wish to purchase. Ad exchange makes the whole process more efficient and transparent. However, there are other ways of buying ad inventories, like through Ad networks. Some of the well-known ad exchanges are Verizon Media, AppNexus and Google Ad Exchange.
8. Ad networks:
Ad networks act as a bridge between a media buyer and a publisher, thus reducing the complexity of the entire advertising process and bypassing Ad exchange. Ad networks typically aggregate inventory from a range of publishers, mark it up and sell it for a profit. That’s their business model. Some Ad networks also buy their inventories from Ad exchanges as visible from the diagram above. AdSense is a pretty neat example of an Ad network.
PS: Advertisers and Publishers can also directly interact with the Ad exchange.
Time to describe some customary buzzwords, which are widely used and fall as ad-hoc services around one or more of the above-described components.
9. DMP:
Data Management Platforms. DMPs have emerged to help marketers, publishers, and other businesses make sense of it all form of digital media.
DMP with DSPs: offers a central location for marketers to access and manage data like mobile identifiers and cookie IDs to create targeting segments for their digital advertising campaigns. Publishers also often use DMPs to house data about their users and pass audience segment data to the DSP for ad targeting. The DMP then continues to pull in performance results of those segments, analyzes which audiences are performing well or poorly, and feeds that information back to the DSP. The DSP uses that to optimize ongoing campaign bidding and targeting. DMPs talk to DSPs through their integration channels.
Adobe Audience Manager, Oracle, Nielsen, and Lotame would be some good examples of DMPs.
10. Distribution channels:
DMPs talk to DSPs through their integration channels.
11. Media buyers:
Media buyers are a part of the advertising team who negotiates on behalf of their clients(advertisers) to negotiate the audience-targeted time and advertising space to convey a marketing message. A media buyer links the ad to the intended audience to make the ad effective. These ads are intended to sell a product and may be published on TV, online, newspapers, or magazines. The media buyer negotiates the price and placement of the ad for the advertisers.
12. Trading Desk:
A service committed to helping advertisers and agencies buy online advertising as a managed service. They use either a proprietary technology or a demand-side platform (DSP) to buy and optimize media campaigns on ad exchanges, ad networks, and other available inventory sources they are connected with.
13. Ad server:
An ad server is a piece of advertising technology (AdTech) that is used by publishers, advertisers, ad agencies, and ad networks to manage and run online advertising campaigns. Ad servers are responsible for making instantaneous decisions about what ads to show on a website, then serving them.
14. Pixel:
A tracking pixel (also called 1x1 pixel or a pixel tag) is a graphic with dimensions of 1x1 pixels that is loaded when a user visits a webpage or opens an email.
15. Types of data:
1st party: the information you collect for free through your own sources
2nd party: It’s essentially someone else’s first-party data.
3rd party: Bought from other companies/aggregators.
16. Campaign:
An advertising campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication. For example, a company runs an ad campaign when it has a product or service and it becomes vital that potential consumers learn about the new offering to entice the customer to buy the same.
Let’s define some well-known algorithmic terms in Adtech. Each of these concepts is highly complex and deeply intertwined in the ecosystem. The following notions can be metaphorically described as ‘oil’ in the above system of ‘gears’.
17. Real-Time/Online Bidding:
The buying and selling of online ad impressions / digital advertising through what’s referred to as “real-time auctions” take place in milliseconds, or the time it takes a web page to load. These auctions usually take place via ad exchanges, and the price paid for impressions is based on immediate demand.
Advertisers use their DSPs to bid for ad space and the SSP defines the bid range. The DSP automatically offers a mutually beneficial price, and the SSP looks at the available bids to select the best ad — all in real-time. The SSP may choose to do one of the following for the article or video at hand:
a) If all the prices are too low and there is no winning advertiser, the slot will be kept vacant
b) After going through several bids, the highest one is selected.
c) It negotiates with that advertiser to get the desired ad, but at a lower price18. Targeting:
The process of displaying advertisements to users online on their demographic and psychographic features. For example, a brand like ‘Kawasaki’ would want to target medium to high earning males in New York to look for maximum conversions.
19. Cookie Sync:
Scene I: Advertisers’ side of the story:
A user, Carl, is searching for a ‘Mother’s Day’ present on Amazon.com. He’s found the perfect gift and was about to checkout. However, he got interrupted by his sister and couldn’t end up ordering. Since DSP1 works with amazon.com, it has set a pixel on the amazon.com website. Because of this pixel, Carl calls out to DSP1′s web server as they load the shopping cart page, giving DSP1 a chance to drop a cookie on Carl. So, Carl’s browser now has a cookie stored, namely, Carl_DSP1
Scene II: Publishers’ side of the story:
Carl is browsing the TimesofIndia.com website, which is using SSP1 to monetize their ad inventory. The website serves a 3rd party redirect to SSP1, which drops a cookie on Carl with a cookie ID as Carl_SSP1. SSP1 now requests a bid from DSP1 among other bidders for the impression that Carl_SSP1 is about to view.
But wait, how does DSP1 know that Carl_SSP1 = Carl_DSP1? On this first ad, it doesn’t, so your DSP doesn’t bid on the impression. But for subsequent requests of a bid from the same SSP1 to the same DSP1, there would be a table keeping matches of SSP and DSP side cookies. This constant process of a table update happens magically through an action known as Cookie Sync.
Behind the scenes:
- SSP1 selects a winning bidder though and it runs one last piece of javascript that forces Carl to call out to a handful of regular bidders, including DSP1
- Now Carl is calling DSP1′s web server and the DSP can request its own cookie from Carl in a process the industry refers to as “piggybacking”. Eureka!
- DSP knows the SSP side cookie ID because of the query string in the piggyback call.
- DSP can read its own cookie belonging to Carl because Carl called its web server as the end destination with the piggyback call
- DSP1 now writes into its database that Carl_DSP1 = Carl_SSP1 for bid requests from SSP1.
The next time Carl hits a page that SSP1 is helping to monetize, DSP1 will know it is the same user that abandoned their shopping cart and can bid appropriately. The process repeats for sites using other SSPs. Voila!
20. Re-targeting:
Retargeting enables you to remind your customers of your products and services after they leave your website without buying. It allows you to show your visitors relevant ads when they visit other sites. Retargeting works with apps and searches as well as website banner ads. Serious marketers today use retargeting as a vital tool to connect with their customers and increase their sales. Cookie sync described above is the technology used for re-targeting.
21. Identity Resolution/Cross-device cookie syncing:
To be able to link users across devices and target them wherever they’re available online. Cross-device retargeting means that advertisers can serve retargeting ads to people across multiple devices. Retargeted users could now be shown ads on their phones, tablet, desktop computer, etc. There are 2 ways to link users across device:
Deterministic: Deterministic cross-device tracking is when publishers and platforms ask their users to sign in to their websites and apps on every device they use. This allows digital media properties to track their users across devices exactly.
Probabilistic: Finding patterns in data usage considering attributes like IP, device type and app or web browser
The video here by Pete Kluge is highly informative and summarizes the display advertising basics.
The next post is about a variety of products and solutions that exist in the Adtech industry.
