Exploring The Display Advertising Landscape
With hundreds of new ad tech companies appearing in the ecosystem every year, it may be difficult to figure out how they relate to each other. Luckily for you, I have simplified this complex topic for you.
As mentioned in my previous article, sales of digital advertisements began with advertisers approaching publishers directly for their impressions. Over the years, many new technologies emerged to facilitate this trade; the landscape gradually increased in complicity and evolved into what it is today.
At the two ends of this landscape are the founding members: advertisers, publishers and consumers (not shown in the diagram). Advertisers fund the growth of the ecosystem, publishers create content to attract consumers, consumers respond to the ad by purchasing from the brands of the advertisers.
At the top, we have the basic set of tools that advertisers and publishers use to buy /sell ads. Agencies are companies which help brands decide what and where to buy ads to achieve their objective. E.g. Coca Cola wants to launch a new campaign to increase brand awareness. It may not know which sites or apps it should show its ads on to reach the most people. This is when an agency comes into play to help the brand make its purchase decision.
Using the same example, an agency may know that putting ads on Buzzfeed will contribute to Coca Cola’s brand awareness campaign, however, it may not know how to secure ad inventory at Buzzfeed at a low price. This is when agencies find trading desks who specialise in programmatic buys for help. They are able to lump different demands together to secure a better price in bulk purchases. In this example, a trading desk may have also received demand for Buzzfeed inventory from KFC, Honda and Toyota. It will lump these demand together to bulk purchase from Buzzfeed at a lower price.
It is likely that the trading desk didn’t purchase the impressions from Buzzfeed directly. Instead, it bid for the impressions through various ad exchanges. These ad exchanges are online marketplaces that allow buyers bid for publishers’ impressions in real time bidding. The DoubleClick Ad Exchange is an example of an ad exchange.
Because there are many ad exchanges in the market, trading desks and ad networks typically make use of demand-side platforms (DSP) to manage their demand. Google’s DoubleClick Bid Manager is an example of a DSP.
On the publisher side of the story, Buzzfeed will work with various ad networks and ad exchanges to sell its remnant inventory. In order to manage these complicated distribution of impressions to different parties, publishers will usually make use of supply-side platforms (SSP). Google’s DoubleClick for Publisher is an example of a SSP.
Other than managing and tracking the massive amounts of inventory brought across different ad networks and exchanges, many demand-side platforms also have the ability to integrate first and third-party data. This allows advertisers to be informed about the audience segments and bidding rules.
Apart from the main functions of buying and selling inventory, there are many tools that enhance the performance of programmatic advertising. Companies providing creative optimization, for example, can allow advertisers to show different creatives to different audience segments or even automatically create new creatives; other tools include data management, ad verification, measurement, analytics and more.
The display advertising landscape can be overwhelming with the many choices available. A simple way to build up your programmatic buying/selling capability is to take things one step at a time; starting from one of the two ends that makes more sense and build your way towards the center, plugging in additional tools when needed.
For more great content, please follow my blog: https://medium.com/wired-mesh
Disclaimer: All examples used in this article are fictitious. In reality, the lines that separate the different mentioned tools are disappearing. Many platforms now fall under multiple categories.
