programmatic advertising

A lot of brands turn to top advertising platforms to help them get more customers. Of late, in the context of advertisement, there is a new buzzword; “Programmatic advertising.” 

Any brand that wants to make the most off data analysis and still enjoy a low ad budget, should opt for programmatic advertising platforms, as this would help them get more conversions. 

In the course of the article, we would be taking a dip at; what programmatic advertising is, how it works and how to adjust your marketing strategy and get the best off programmed ads. Without further mouthing, let us delve in. 

What is Programmatic Advertising?

Programmatic advertising involves the use of programmed algorithms to target audiences and increase the number of prospects for a brand.  Programmatic advertising indulges artificial intelligence as these algorithms are pre-built to monitor the past activity of a web user, and use their interests to show ads to them. 

For instance, someone might google, “free nord vpn premium account”, then log on to facebook and get an ad about “best vpn services”. This is a use case of programmatic advertising. 

Cookies are used to store data about what a user binges, then products that are of similar interests to the user are shown to the user. This would increase the conversions, as people are usually more likely to opt for a product solution that they have interest in. 

Programmatic advertising is very much more effective than conventional advertising. Truth is programmatic adverts are targeted to market segments. So, when you want to bid for a programmatic ad space in any advertisement platform, you should be well aware of the market segment that you would want to target. 

How Does Programmatic Advertising work?

First things first, advertising works with the partnership of two categories of individuals; the advertiser and the publisher. A blogger that monetizes his/her site to show ads to users is a publisher. Any business or individual that goes to an advertisement platform to bid for an ad space, is an advertiser. With this fore knowledge, let us look at how programmatic advertising works in a nutshell;

  • A prospect visits the site or platform of an ad publisher
  • The publisher puts up ads for auction using the SSP(supply-side platform software used for selling ad spaces in an automated way). Kindly know that most publishers have zero knowledge of this, have their ads managed for them by their advertisement platform of choice, for instance; Ezoic and 
  • The advertiser places a bid for an ad space with the aid of a Demand side platform. A demand side platform (DSP), is an automated inventory that is used in the maintenance of multiple ad exchange accounts. 
  • The advertiser with the highest bid ends up as the winner of the ad impression. 
  • The programmatic ads are now served to the platform of the publisher: which in this case, can be an app, desktop application or a blog. 
  • The website visitors in the last stage would click on an ad and maybe, convert! 

Notwithstanding all the many steps that are involved in programmatic advertising, the buying and selling of ad impressions just takes place in seconds, in some cases, milliseconds! Moreover, algorithms are used to calculate what the best cost-effective bid would be. 

For example, if the website of the programmatic advertising publisher has a strong chance of engaging visitors with good content, the advertisement bid made to the site would be higher. 

Role of Supply-side Platforms in Programmatic Advertising

In transactions that involve programmatic ad transactions, SSPs play a significant role. With the aid of an SSP as they are so called, one can connect to ad exchange networks, data management networks and DSPs. With these connections come publishers that can just integrate an ad network into their sites, which would thus act as a platform for automating ad-buying and selling. 

Here are some examples of processes that supply side platforms take care of:

  • Optimization of Ad-networks
  • Real-time ad bidding 
  • Frequency capping 
  • Relevancy 

Let us now delve in deeper into a brief overview of some of the processes that can be handled by a Supply-side platform. 

#1. Optimization of Ad-networks 

One of the common characteristics of supply side chains is that they sell individual ad impressions. This approach by SSPs gives ad publishers more control over their own ad inventory.  This applies more to publishers that use ad exchange networks. Here these publishers can actually see who is paying for an ad space in their inventory, and thus optimize their adverts accordingly. 

#2. Real-time Ad Bidding 

When we say real time bidding, we simply imply that Supply side platforms can sell the ad inventory of a publisher in an automated fashion. SSPs usually do this with the aid of ad exchange networks. One very common example of an Ad network is Ezoic. 

#3. Frequency Capping 

Frequency capping in the context of programmatic advertising is the process of recording the number of times a web site visitor sees an advert. Both supply side platforms and demand side platforms use frequency capping. 

#4. Relevancy 

With the aid of an SSP, an advert publisher can ensure that only ads that are relevant can be streamed on sites of ad publishers. 

Role of Demand Side Platforms in Programmatic Advertising 

Simply put, the role of a DSP is to give advertisers the option of buying ad impressions on the sites of publishers as made available with ad exchange networks. 

With a Demand side platform, an advertiser can choose to target a specific market audience with the aid of sensitive data. Examples of such sensitive data include; previous online behavior, location, search history, age, etc. 

A DSP is also used to allocate impressions for an ad space based on the bid price and the audience the advertiser wants to target. 

Types of Programmatic Advertising 

In the course of subsequent paragraphs, we would be looking at the different types of programmatic advertising. 

#1. Real-Time Bidding(RTB)

This is a unique type of programmatic advertising that works in the form of an open auction marketplace, where buyers and sellers bid, buy and sell ads. In real time bidding, advertisers can make a pick on available ad spaces. Real time bidding happens in seconds

#2. Private Marketplace

This is another programmatic ad type that works with the principle of “only-invite basis.” Private marketplace ad publishers can also be called closed auction publishers. This programmatic ad type is usually reserved for a select few advertisers.

With the private marketplace ad type, websites that have a lot of visitors can benefit more than sites with few web visitors. In contrast with the popular RTB (real time bidding) ad type, the programmatic advertiser has a broad scope of the sites where their ads are being placed. This way, advertisers can easily check to see if they have a tangible ROI (return of investment). 

#3. Preferred Deals 

The preferred deals programmatic advertising works in a way where advertisers are made to choose the ad inventory of publishers at a fixed price. This is done before the ad bid is made available to the private marketplace, after which, an open auction would follow suit. 

Another name that the advertisement industry calls preferred deals in the context of programmatic advertising is “spot buying.”

#4. Programmatic Guaranteed 

Programmatic Guaranteed is the last type of programmatic advertising, it can also be called programmatic direct. It involves direct negotiation between a publisher and an advertiser.

By Anurag Rathod

Anurag Rathod is an Editor of, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.