Let's Discover What Programmatic Advertising Platforms Are About!

Let’s Discover What Programmatic Advertising Platforms Are About!  

What’s the big deal with programmatic advertising anyway? Well, it’s practically everywhere, and 30.5% of marketers plan to invest more or maintain their spending on programmatic advertising platforms this year.  

If you’re an online marketer, you’re likely familiar with big names like Google Marketing Platforms, Criteo, and AdRoll — the go-to programmatic advertising platforms.  

However, programmatic advertising and the evolving needs of marketers have paved the way for many other competitors to offer appealing alternatives. 

So, what’s the deal with programmatic advertising, and what alternatives to those well-established players exist? This article will get into details — what it is, how it ticks — and introduce you to various programmatic platforms to rock these platforms into your brand strategy. 

Short Intro to Programmatic Advertising 

Programmatic advertising uses automated and algorithmic technology for media buying and selling (the process of buying or selling ad space). 

Basically, programmatic advertising differs from traditional media buying or selling in terms of how this process goes. Programmatic advertising uses software to buy or sell digital ad space, while traditional digital advertising methods generally contain requests for proposals, tenders, quotes, and negotiation. 

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The automation that programmatic advertising enjoys is great because it ensures that your ads reach your specific audiences (the right person, in the right spot, and at the right time) based on data-driven decisions in a much more efficient and faster way. That’s why programmatic advertising is so popular nowadays and is expected to reach an ad spending of over $557 billion by the end of 2023. 

The most common types of programmatic ads are: 

What are Programmatic Advertising Platforms? 

A programmatic advertising platform is an online marketplace where publishers (those who own and provide ad space on websites/apps for displaying ads) sell their ad inventory, and advertisers (businesses or individuals who pay to have their ads displayed on publishers’ websites/apps) buy ads programmatically.  

Simply put, it’s a middleman for websites that generate ad revenue through ads and brands aiming to advertise. 

How Do Programmatic Advertising Platforms Work? 

How Do Programmatic Advertising Platforms Work?

As we previously said, programmatic advertising platforms act as intermediaries between people who want to generate revenue by accepting ads on their websites/apps and brands wanting to advertise. 

When a publisher becomes part of a supply side platform, that platform gathers information about the publisher’s available ad space. Each time a user visits a publisher’s website, watches a video, or opens an app connected to an SSP, the ad space becomes available for purchase on that SSP or ad exchanges. These exchanges act as marketplaces where SSPs sell ad inventory to advertisers. 

So, when a brand wants to run an online ad campaign for its product or service, it gets in touch with its programmatic ad agency or trading desk. This agency uses a demand side platform (DSP) to make the process of buying ad space more automated and efficient, helping the campaign reach its goals. 

Here’s how it works: when someone visits a website or app connected with an SSP (supply side platform), the space for ads is made available, and an ad server sends an ad impression request to the SSP. The SSP then sends this request to multiple ad exchanges, triggering simultaneous RTB auctions. 

Simultaneously, DSPs gather user behavior and preference data from various sources, including first-party, third-party, and contextual data. DSPs analyze each ad impression and submit bids to the ad exchange based on this data. 

The SSP conducts an RTB auction among potential ad buyers, including the DSP. Within milliseconds, the DSP analyzes the available data and submits bids for ad spots. The advertiser with the highest bid wins, and the ad instantly appears to the visiting user. 

All these processes happen super-fast thanks to real-time bidding (RTB) technology to ensure the right ad reaches the right person at the right time. 

After that, advertisers collect performance data with every impression to optimize future bids and improve targeting. This continuous optimization is part of what makes programmatic advertising effective. 

Benefits of Programmatic Advertising Platforms 

Benefits of Programmatic Advertising Platforms

Large Audience Reach 

Programmatic advertising platforms achieve extensive outreach, leveraging cross-platform inventory for maximum impact. 

Low-Cost Awareness 

Programmatic is a cost-effective advertising method, with average CPMs ranging from $1 to $5. Even with a modest budget, it offers impactful targeting and increased awareness. 

Real-Time Data 

Real-time bidding in programmatic platforms provides advertisers with near-instant data, enabling quick decision-making and a proactive advertising approach. 

Utilizing First-Party, Third-Party, and Contextual Data 

Programmatic platforms enable direct targeting of specific audiences by allowing advertisers to upload and utilize their first-party data securely.  

If advertisers lack sufficient first-party data, programmatic platforms also provide access to many third-party data segments that can allow advertisers to target specific demographics, behaviors, and interests, reaching a broader audience even without extensive proprietary data. 

Moreover, programmatic advertising platforms leverage contextual data, considering the content and context of a user’s online activity. This ensures that ads are directed at the right audience and aligned with the content they are engaging with, enhancing the overall relevance of the ads. 

Cross-Device Campaign Strategy 

While often seen as an awareness tactic, programmatic’s key role is capturing initial user awareness. It sets the stage for successful cross-device campaigns, allowing for remarketing based on user interactions across platforms. 

Types of Programmatic Advertising Platforms 

Types of Programmatic Advertising Platforms

While there are more programmatic advertising platforms out there, it’s practical to focus on these three main components of the programmatic ecosystem (being the most important and popular): 

  1. Supply Side Platforms (SSPs); 
  2. Demand Side Platforms (DSPs); 
  3. Ad Exchanges. 

1. Supply Side Platforms (SSPs) 

What Is a Supply Side Platform?

A Supply Side Platform (SSP) is part of programmatic advertising, a specialized software designed to assist publishers in selling their available ad inventory.  

Essentially, SSPs manage the distribution of ad space within a platform. It’s like the suppliers in the ad space selling process. They provide advertising spaces to Demand Side Platforms (DSPs), ad exchanges, and ad networks, allowing them to deliver their campaigns through bidding. 

They utilize the Real-Time Bidding (RTB) process to secure the most lucrative deals for the ad inventory publishers have listed. They can swiftly deal bids in milliseconds, ensuring that available ad slots are filled with relevant ads at the best possible price. 

2. Demand Side Platforms (DSPs) 

what-is-DSP

A Demand Side Platform (DSP) is a programmatic advertising platform designed to help advertisers purchase ad inventory.  

When an advertiser plans a campaign, the Demand Side Platform (DSP) is activated and begins gathering information about the ad, like the target audience, ad format, and size. Once it has the necessary data, the DSP interacts with ad inventory sources, such as Ad Exchanges and Supply Side Platforms (SSPs), to identify the most suitable prospects. 

The DSP places bids for ad inventory that align with its criteria, and the highest bid secures a particular ad slot. 

3. Ad Exchanges 

Introducing Ad Exchanges

Ad Exchanges are digital marketplaces where individuals can trade ad space using a Real-Time Bidding (RTB) system. This is how the supply side platforms feed inventory into the ad dealings. 

Ad exchanges assist publishers in optimizing their available traffic inventory. Simultaneously, they enhance transparency for advertisers, enabling them to purchase traffic from various publishers without the need for individual negotiations. 

There are three main types of ad exchanges: 

  • Open Ad Exchanges – is precisely what it sounds like–an ad exchange that is open to anyone to access. 
  • Private Ad Exchanges – an exchange that can only be accessed by specific advertisers. 
  • Preferred Deal – a type that facilitates the negotiation process between a publisher and an advertiser. 

SSP vs. DSP vs. Ad Exchange 
 

Criteria SSP  DSP  Ad Exchange 
Function Manages and sells ad inventory for publishers. Facilitates the purchase of ad inventory for advertisers. Serves as a digital marketplace for buying and selling advertising space. 
Role “Supplier” in the ad space selling process. “Buyer” in the ad space purchasing process. Facilitates the exchange of ad inventory between publishers and advertisers. 
Inventory Source Publishers’ available ad inventory. Advertisers’ purchase of ad slots. A marketplace where advertisers and publishers trade ad space in real-time. 
Bidding Process Uses RTB (Real-Time Bidding) to maximize deals. Engages in RTB to find optimal proposals. Operates on an RTB system for real-time buying and selling of ad inventory. 
Decision Automation Automates the bidding process for ad space. Fully automated decision-making for bidding on ad space. Automated systems for seamless bidding between advertisers and publishers. 
Optimization Maximizes revenue for publishers. Optimizes campaigns on available ad space. Maximizes traffic inventory for publishers and enhances transparency for advertisers. 

How Much Does Programmatic Advertising Cost? 

On average, a programmatic ad campaign typically costs between $1 and $5 CPM.  

However, the cost of programmatic advertising can differ based on the CPM (cost per mile) model. If advertisers opt for more specific targeting, the cost may go up. And so it is if they opt for other factors because various factors influence the prices, including the type of industry, the targeted device, ad format, and ad placement on the page. 

Even so, programmatic CPMs are generally more affordable than social media advertising methods and offer better value than traditional offline approaches. This affordability makes programmatic ads a viable option for small businesses with limited marketing budgets, allowing them to incorporate programmatic ads into their digital marketing strategy. 

Top 9 Programmatic Advertising Platforms in 2023 

Top 9 Programmatic Advertising Platforms in 2023

Google Ad Manager is a widely used tool in marketing. This platform serves as a supply side platform (SSP) and stands out globally. 

Google Ad Manager supports various ad networks, including Ad Exchange, AdSense, and third-party platforms. It boasts user-friendly features like granular ad targeting, team creation, detailed reporting, and open bidding. Notably, it offers a handy feature called Protections, allowing users to set rules ensuring that advertisers align with basic requirements, promoting website relevance. 

Magnite 

Magnite, the largest independent SSP, focuses prominently on demand for connected TV (CTV). Formerly known as Rubicon, Magnite emerged in 2020 after a merger to advance technologies for buying and selling advertising inventory. With a real-time cloud and big data computing system, Magnite swiftly handles trillions of monthly transactions. Users can manage campaigns, access detailed analytics, and oversee ad inventory. 

Xandr 

Xandr, formerly AppNexus, is a valuable platform for those seeking to connect with multiple demand side platforms (DSPs) to sell their ad inventories. Utilizing prebid-powered header bidding technology, deal capabilities, and curated premium demand, Xandr provides detailed yield analytics, data-driven yield optimization, and advanced tools despite some users finding it less user-friendly. 

PubMatic 

PubMatic is often recommended for independent publishers looking to control and increase revenue. This platform matches premium demand with a publisher’s ad inventory, optimizing audience access across screens, channels, and formats. PubMatic excels in omnichannel monetization technology, offering built-in ad quality tools and private marketplaces for advertising inventory. 

Amazon DSP 

Amazon DSP, launched by the world’s second-largest tech company, Amazon, caters to advertisers aiming to promote their products on Amazon or other Amazon-owned websites, regardless of whether they sell products on the platform. Amazon DSP provides two options: a self-service option that is entirely free, allowing advertisers to handle the entire process independently, and a managed service option where advertisers pay at least $35,000 for constant guidance in the ad buying process. 

MediaMath 

MediaMath, founded in 2007, offers valuable tools for marketers, highlighting customer service to provide advertisers with a positive user experience. Integrated with multiple ad exchanges, MediaMath provides numerous advertising opportunities. The platform utilizes advanced predictive algorithms to help advertisers make profitable bids. 

Basis Technologies 

Basis Technologies, rated the top demand side platform for 16 consecutive quarters, offers a comprehensive and highly useful product. Its interoperability with social, search, and ad server platforms enables users to leverage programmatic advertising effectively. Basis Technologies streamlines the advertising process with features like billing automation and a vast selection of premium publishers. 

Smadex 

Specializing in the mobile sphere, Smadex is a demand side platform designed for user growth. Utilizing programmatic advertising, first-party data, and machine learning, Smadex provides a mobile-first DSP solution. The platform prioritizes security, ensuring that campaigns reach safe and trustworthy publishers. Currently, Smadex holds the top position for fraudless DSP installations according to the Kochava Traffic Index. 

SmartyAds 

SmartyAds offers a white-label ad exchange platform called Smart Hub. Also, it operates as a full-stack programmatic ad tech platform, serving as both a DSP and SSP for advertisers and publishers. The platform supports various traffic types and ad formats, including video, banner, audio, native, push, pop, and more. 

Key Takeaways 

  • Programmatic advertising involves using automated and algorithmic technology for media buying and selling, differing from traditional methods in its automated approach. 
  • Common programmatic ads include display ads, video ads, native ads, connected TV (CTV), and digital out-of-home (DOOH). 
  • Programmatic advertising platforms are online marketplaces that act as intermediaries between publishers and advertisers, facilitating the buying and selling of ad inventory. 
  • The main benefits of programmatic advertising platforms are that they offer an extensive audience reach, low-cost awareness, real-time data, and the utilization of first-party, third-party, and contextual data, which contribute to the effectiveness of programmatic advertising. 
  • The key components of the programmatic ecosystem are Supply Side Platforms (SSPs), Demand Side Platforms (DSPs), and Ad Exchanges. 
  • On average, a programmatic ad campaign costs between $1 and $5 CPM, making it an affordable option compared to social media and traditional advertising. 
  • Notable platforms in programmatic advertising include Google Ad Manager, Magnite, Xandr, PubMatic, Amazon DSP, MediaMath, Basis Technologies, Smadex, and SmartyAds.