A Walk Across The Lumascape

5 key steps of every programmatic transaction

Chris Kane

More than $15 billion of ad spend will be transacted through programmatic channels this year, and that budget will flow through a famously fragmented set of technology systems. But what specifically are the steps behind a programmatic transaction? How does a single ad move across the Lumascape? In this post, we will break down the 5 key steps of every programmatic impression.

The image below depicts a real Kia ad served on vocabulary.com. The ad was transacted through an RTB auction and is a very clean example of the must-have components of every programmatic impression: publisher ad serving, ad auction, bidding, advertiser ad serving, and opt out.

Step 1: Publisher Ad Serving

Vocabulary.com uses Doubleclick as its publisher-side ad server. When the page loads, Vocabulary’s content management system makes a request to Doubleclick to load a 728x90 ad at the top of the page. Doubleclick then checks for potential buyers, making requests to Vocabulary’s roster of direct sold campaigns as well as remnant demand sources like ad networks and ad exchanges.

Step 2: Ad Auction

In our example, OpenX, an ad exchange, is one of the demand sources contacted by Doubleclick. Upon receiving notification from Doubleclick that there is a 728x90 ad slot available on vocabulary.com, OpenX conducts an auction for this impression. OpenX sends bid requests to multiple external bidders that represent advertisers. These bidders include both ad networks and demand-side platforms (DSPs).

Step 3: Bidding

Turn, a DSP, receives the bid request from OpenX and evaluates all campaigns running within its platform to identify a potential buyer for this impression. Turn replies to OpenX with a bid on behalf of Kia. After collecting bid requests from all other bidders, OpenX identifies Turn as the winner of the auction and awards the impression to the Kia campaign.

Step 4: Advertiser Ad Serving

Turn is now responsible for providing Kia’s creative asset back to OpenX. Kia works with Doubleclick as its ad server, so Turn makes a request to Doubleclick to provide a 728x90 display ad. (A small sidenote here is that Doubleclick dominates the market for both publisher and advertiser ad serving. These are completely separate products that live at opposite ends of our example programmatic impression.)

Step 5: Opt Out

We are functionally done serving the Kia ad, but there is one final step that is required to comply with industry privacy standards. In addition to retrieving Kia’s ad creative, Doubleclick makes a request to Ghostery (formerly Evidon) for an opt-out button. Ghostery sends to Doubleclick an AdChoices button, which Doubleclick overlays at the top right corner of the Kia ad. This button allows the consumer receiving the Kia impresison to opt out of receiving additional ads from Kia.

Having now completed the transaction, all creative assets need to flow back through the ad serving chain to reach vocabulary.com. Ghostery provides the opt-out button to Doubleclick. Doubleclick passes the ad to Turn, who passes it to OpenX, who passes it to Doubleclick, who places the ad in the ad slot at the top of the vocabulary.com page.

You are now armed with the fundamentals of a programmatic ad transaction. Things can get much more complicated from here. Our example doesn’t include any daisy-chained auctions, attribution tracking, or dynamic ad serving. We also didn’t cover any server-side data exchange like behavioral targeting or brand safety evaluations. Programmatic transactions can become brutally complex, but they all include the 5 key steps outlined above. Wrap your head around these 5 steps, and you’ll have the foundation to tackle any programmatic problem.

The nerds out there can trigger a live OpenX auction here. Refresh a few times to see different winning bids. Everyone can read more on the Jounce Media Blog