Data technologies have turned the online advertising universe into a multiple channel ecosystem that is in constant evolution. Understanding its organization and dynamic is easier than it seems. Retargetly wants to guide you through it.
Advertising has always worked on a two-party basis: Advertiser and Publisher. The first one represents a company that wants to advertise on the web. The second ones are websites with a lot of traffic, which monetize their ad spaces through advertising. The Advertiser will purchase ad spaces from the Publisher. Easy, right?
Suddenly, we start adding terms such as programmatic or data, and things get trickier. But the truth is, programmatic or online advertising is not all that complicated. Digital technologies have managed to transform the two-party exchange, into a multiple channel transaction, creating a rich and evolving ecosystem.
A wave of innovative technologies has allowed online advertising to become more effective. In other words, thanks to new digital platforms Advertisers are constantly improving the way they reach a consumer, while Publishers are boosting their ad spaces sales.
Question here is, how? Let us guide you trough it.
Understanding the digital Ad Market
Programmatic advertising can take place at several levels.
At the first level the Advertiser or Media Agency will directly purchase from the Publisher on virtual spaces such as a Private Market Place or simply through a direct, private exchange. This transaction concerns Premium inventory: ad spaces with privileged position or timing, such as the home page of a website.
A second exchange occurs through a virtual platform known as the Ad Exchange: a Digital Marketplace for ad spaces, places available for the ad to be displayed. The transactions here are made through an auction system: unreserved Ad inventory is sold to the best bidder.
Now, the third level is where things get a little messy.
The thing is, the bidding here goes extremely fast, and it never stops. Every time a user enters a website, a call for bidding is placed. The transaction is performed in milliseconds. So how does the Advertiser keep up with this?
Through a Demand Side Platform (or DSP). The DSP is in fact in charge of the bidding. The platform allows the Advertiser to bid on a constant basis, on several ad spaces for different ad campaigns. Basically, the DSP allows the Advertiser to get a centralized campaign management.
Real Time Biding for an efficient Ad placement
More importantly, the DSP can place its bid on a real time basis, so as to reach the right consumer, at the right place, at the right time. This is better known as Real Time Bidding (or RTB). In other words, RTB allows the DSP to reach the ideal consumer at the very moment he enters the website. This way, the ad displayed can be more effective.
Let’s say the Advertiser here is a sports shoes brand. The DSP identifies an interesting user and an available ad space to buy; it could be a big banner on a popular website. But it is not the placement that is appealing for the Advertiser, it’s who sees the ad. The Advertiser is not interested in occupying that impression when an elderly person interested in gardening enters the website. It is a one-time operation which occurs in the milliseconds when the user enters the website. The whole operation starts over every time a new user loads a webpage.
User identification and Audience Targeting, how does it work?
At this point you’ve understood how identifying the user is vital for performing an effective targeting campaign. Now, you must be wondering how the identifying system works. Or even, what do we mean when we talk about Audiences.
The identification system is actually pretty simple. Every time a user enters a website, he is categorized into more than 300 segments depending on the demographic data, interest data or in-market purchase intention revealed by his online behavior. Each time a user is categorized into one of Retargetly’s segments it is assigned a specific Data Point (for example: interested in sports is a data point). A single user can acquire several Data Points through his online navigation behavior. These Data Points add up to create a profile of his interests.
When the user is assigned a Data Point directly from the website he visits, it is said it is 1st party data. When the user enters the website, and has already been assigned another Data Point in another website, we’re talking about a 3rd party identification (same user, data point assigned by other website; a car website can have a lot of 1st party data in vehicles in-market purchase intention and some 3rd party data in users interested in cooking and recipes).
This individual identification system will later allow the creation of Audiences: groups of users combined by the client to create specific targeted campaigns.
Now, who is in charge of the whole identification system and Audience creation?
DMP’s or Data Management Platforms such a Retargetly.
DMP’s are in charge of collecting user data on the web, analyzing it, and organizing it into segments, that will later allow the client to create Audiences and activate them through multiple media platforms.
Audiences can also be appealing for Publishers who want to know their users in order to optimize their Ad inventory’s sales. By creating targeted campaigns for their clients, Publishers can improve their ad impressions results and increase the client’s ROI. Retargetly’s most popular feature within the DMP for Publishers product is Audience Extension. This gives the Publisher the possibility of offering its client the capability of reaching the Publisher’s audience even when the user is not in the Publisher’s network.
DMPs such as Retargetly can also be used to perform an operation called retargeting (within a DSP). Through this process, the DMP will activate the user’s data collected on a first party basis whenever he visits a new website. This way, the Advertiser can reach the user, even when he has left the Advertiser’s webpage.
Through data compilation, a DMP can also help the Advertiser and the Publisher measure the results of their targeting campaigns.
The Programmatic Buying Ecosystem can indeed be considered as a complex extension of the primary Advertiser-Publisher relationship. Yet, due to its constant evolution, Programmatic Buying, has proven to be more than that. Nowadays, it stands as an essential tool for an efficient advertisement.