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What is Programmatic Advertising – Step by Step Guide to Learn Programmatic Advertising?

What is Programmatic Advertising – Step by Step Guide to Learn Programmatic Advertising?

In its simplest form, programmatic advertising is the automated transaction of buying and selling advertising online. It’s the process of using different platforms to sell inventory on publishing sites and on the advertising side, buying inventory, and placing ads on a publisher’s site. This is also sometimes referred to as programmatic marketing.


Here’s the step-by-step explanation of how Programmatic Advertising works:


Step 1:

When a viewer lands on a website that uses programmatic advertising, it starts the automated bidding to serve an ad to this particular viewer.


Step 2:

The publisher lists the ad space for this viewer on their supply-side platform (SSP). The SSP acts as the seller for the publisher, letting advertisers know the characteristics of the site, user, and ad space that allows DSPs to make their bids. Essentially, they advertise the product (the ad space) for sale.


Step 3:

Once the SSP receives the information on the ad space, they analyze the user’s cookies to determine factors such as their geography, demographics, interests, etc.


Step 4:

Next, the corresponding demand-side platform (DSP) reviews the information on the user provided by the SSP. DSPs act for advertisers to choose ad space that aligns with the advertiser’s budget and targeting parameters. It assigns the ad placement a value based on the website and user’s characteristics.


Step 5:

On behalf of the advertiser, the DSP makes a bid on the ad placement. All this happens in real-time which is why programmatic advertising can often be referred to as real-time bidding (RTB).


Step 6:

Once the SSP receives the bids from various DSPs, the SSP will then pick the winner. There are different bid strategies out there for different SSPs. Waterfall bidding, Client-side, and Header bidding with header bidding are widely considered the most efficient and fair.


Step 7:

Once the winning bid is picked, the SSP displays that ad to the user on the publisher’s site. This entire process happens in milliseconds all while the page is loading for the user.

To learn at your own pace you can also refer to our DV360 Tutorial.

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