Demystifying Programmatic Advertising Lingo

Now that you’ve learned the basics of what programmatic display is, this blog will introduce what you need to look for in a demand side platform (DSP) to evaluate them as a partner for your upcoming campaigns. We’ll start by evaluating proprietary inventories and audiences, then talk about tying the programmatic strategy to your client’s objective and budget.

Demand-Side & Supply-Side Platforms

Before we hop into the programmatic deal types, a recap:

At the very core of programmatic media are demand-side platforms, or DSPs. DSPs are the main engines that help you run your programmatic media campaigns. These are automated bidding platforms that use data learning algorithms to buy media in real-time, commonly referred to as real-time bidding (RTB).

DSPs consist of various components, including open auctions, private auctions, preferred deals, and guaranteed deals, in order for you to achieve your advertising campaign goals and objectives.

On the other side of DSPs are supply-side platforms, or SSPs. These are used by publishers and directly integrate with DSPs to provide inventory for various ad exchanges.

Types of Programmatic Deals

There are several different ways to buy media programmatically. All of these deals are considered inventory deals. Inventories work as a waterfall, meaning that if a publisher’s remaining inventory does not get filled with one deal type, the inventory will get listed on lower-tiered deal types. At the top of the programmatic waterfall are direct publisher-to-advertiser sales, and from there, inventory falls into guaranteed deals, preferred deals, private auctions, and lastly, open auctions. You should incorporate these inventories into your media plan based on your budgets, KPIs, and target audiences.

Programmatic Guaranteed deals allow you to execute direct buys with publishers on a DSP while eliminating manual processes such as exchanging tags, troubleshooting discrepancies, and handling multiple invoices. Keep in mind you are not able to layer on additional targeting within a programmatic guaranteed buy through a DSP (though this can be done on the publisher side). In addition, there is a commitment for impression volume and spend that must be hit. CPMs are set at a fixed price.

Preferred Deals are exclusive, advertiser-to-publisher arrangements for programmatically purchasing inventory in brand-safe environments. They are just below programmatic guaranteed deals in the publisher inventory waterfall, meaning they allow you to get premium access to higher quality inventory at a lower price. Preferred deals provide advertisers with first-look access to custom, non-guaranteed inventory at a fixed CPM. They have set CPMs but no impression requirement or budget commitment.

Private Auctions, more commonly referred to as PMPs (also known as “private inventory”), are when publishers set aside certain inventory for a select group of advertisers. Private auctions give publishers more control over how they sell their inventory while giving select buyers an advantage. The inventory goes to the highest bidder amongst the private buyers, provided the winning bid is above the minimum CPM. If none of the private auction buyers wins or bids on the inventory, it becomes available in a regular, “open” auction.

Open Auction, a.k.a. the Open Exchange, has multiple levels of inventory that can be rolled into one SSP. Open auctions are the lowest tier of programmatic bidding, with the most efficient pricing and reach out of all options. As an example, Rubicon is an SSP that has its own exchange and has inventory within each exchange.

What to look for when choosing a DSP

Now that you know the basics of programmatic inventory and bidding, you’ll want to think about how to choose the right DSP for your business.

Programmatic media vendors are experts at technical selling. This means choosing the right programmatic media partner can be challenging. Start by asking if the platform has its own proprietary channel or API integration with various partners.

Below are some questions to ask yourself when identifying which partners to leverage. It is also important to ask yourself what your key objectives are. There is no one-size-fits-all or clear winner out of all the programmatic media partners and DSPs available in today’s market. In addition, emerging channels such as Connected TV, Digital Out of Home, and Audio are currently only provided by a handful of tech partners such as Google Display & Video 360 (DV360), The Trade Desk, and DataXu.

Questions to ask:

• What is the DSP’s main engine, and how does it work?
• What proprietary inventory is available?
• What proprietary audience data is available?
• What are the channel-specific capabilities? (Display, Advanced TV, DOOH, Digital Audio)
• What service level agreement is available, and is there a customer success team available to support you throughout your journey?
• What other clients have success stories within your specific vertical or similar campaign objectives?

While programmatic media can be complex, once you understand the basics, you can ask the right questions and determine the partner or technology solution that will best suit your needs for today and tomorrow.

For more in-depth help on programmatic media, contact our team.