Categories: Programmatic Advertising|By |11.8 min read|

Programmatic Advertising Types: RTB, DSP, SSP & DMP

Programmatic Advertising refers to the use of technology to automate the buying and selling of advertising space in real-time. It is also known as programmatic marketing. Programmatic advertising works by utilizing an auction based software to buy and sell ad space.

It enables more efficient and targeted types of advertising because advertisers can bid on specific audiences and placements in real-time rather than relying on traditional methods of ad buying that involve manual negotiations and set ad placements. It allows them to segment and target their customers, scale their advertising campaigns, and make the most of their advertising budgets. Through a vast network, programmatic advertising allows brands or agencies to acquire ad impressions on publisher sites or applications.

Advertisers are aware that it increases conversions, ROI, and better audience targeting. Thus, it is a crucial component of their advertising strategy and ought to be a component of yours as well. Programmatic marketing is used by adtech companies to expand the effectiveness and audience of digital advertising. If you have an ad tech company then you should try to incorporate some of these ad formats in your programmatic advertising strategy. Contextual advertising can be used in accordance with programmatic advertising and managed service campaigns.

Always consider the forms of programmatic ads before choosing one to assist you achieve your advertising goals and choose which type is appropriate for you. Programmatic advertising offers contextual targeting. This also aids in matching the appropriate programmatic deals with the appropriate software platforms to successfully forge business connections and boost your ad income.

Programmatic Ad Format

To conduct a successful programmatic campaign, let’s first examine some of the distinctions between the different programmatic ad formats, including as display, native, and video, which can all be purchased across numerous platforms utilising automated bidding across programmatic DSPs. Ad tech companies use almost all formats of programmatic advertising.

The number of programmatic ad formats is much larger thanks to ad tech firms. A publisher’s inventory may now handle a large number of different ad types as opposed to being restricted to display advertisements. According to interactive advertising bureau, there are different formats of programmatic advertising:

  1. Native ads
  2. Video ads
  3. Display ads
  4. Connected TV ads
  5. Audio ads
  6. Digital Out of Home ads

Native Ads

There are several types of native advertising examples that brands can use to reach their target audience. Native ads mimic the look and feel of the platform on which they are shown. Native ad specs include a number of technical requirements that advertisers must follow when developing native ads. These specifications ensure that native advertisements are visually appealing, functional, and compatible with the platform on which they will be displayed.

In programmatic native advertising, publishers sell their ad spots through an SSP, while advertisers interact with a demand side platform to decide which impressions to buy and at what price. Native ads are those that may show anywhere on a third-party website. Advertisers select the impressions they wish to purchase as well as the price.

Video Ads

Making an emotional connection between your business and your audience through programmatic video ads is ideal. Wherever prospective clients may be watching online video content, video advertising enables you to reach them. Before watching a TV show online or while reading a blog, viewers could encounter a video advertisement. There are different types of video ads in programmatic advertising:

  1. Instream video
  2. Pre roll video
  3. Mid roll video
  4. Post roll video
  5. Outstream video
  6. Indisplay video

Display Ads

Although the phrase “display ads” is used to describe any type of online visual advertisement, in the context of programmatic advertising, only the advertisements put in the header, footer, or sidebar are referred to as display advertisements. Although the phrase “display ads” is used to describe any type of online visual ads, but in the context of programmatic advertising, only the advertisements put in the header, footer, or sidebar are referred to as display advertisements.

Connected TV Ads

CTV includes advertisements purchased programmatically and shown on over-the-top (OTT) (computer/mobile streaming) devices. Programmatic TV or Connected TV (CTV) advertising entails and permits: The buying and streaming of programmatic video advertisements through the internet on any device, including smartphones, tablets, and PCs.

Audio ads (voice ads)

The ecology of internet advertising is expanded by programmatic audio advertising. The purchase of adverts for audio material, including podcasts, audio books, digital radio, and streaming music services, is done using the same automated methods. Programmatic audio audience targeting is comparable to audience targeting on other channels that you are already familiar with. Utilize audio-specific data to target genres, playlists, and demographics to fit the tone or subject of a campaign. You may use the same audience targeting solutions from display, video, mobile, and multi-channel campaigns.

Digital Out of Home Ads (DOOH)

The buying and selling of programmatic DOOH is quite similar to that of internet advertising. When such requirements can be satisfied, your message or advertising is instantly shown once you place an advance bid on ad space. This implies that you may approach publicly visible advertising more specifically while also saving time compared to typical media procurement procedures. Using actionable insights drawn from real-world data, you can track and optimise your campaigns and target the people most likely to make a purchase.

Programmatic Deals

In the programmatic ecosystem, there are numerous ways to offer and acquire inventory. Open auctions, private exchanges, preferred deals, and programmatic guaranteed deals are the four basic types of programmatic deals. Any digital type of advertisement may be served online via programmatic advertising deals, which have become the standard in contemporary digital marketing. Each of these programmatic transactions has its own set of advantages. Key programmatic deals are as follows.

  1. Open Auction

    An open auction (open marketplace) determines inventory pricing in real time through an auction in which any publisher or advertiser can participate. Publishers essentially make their media inventory accessible in an ad exchange at a set minimum cost per thousand (CPM) pricing, and advertisers compete for the available media. The impressions are awarded to the highest bidder. RTB impressions are offered to all bidders on the open marketplace.

  2. Private Exchange

    Private Exchanges (also known as private marketplace) are designed for a single publisher to engage with a chosen group of reputable marketers, advertisers, and DSPs, as opposed to an open exchange, where an infinite number of buyers and sellers can connect. It is up to the publishers to decide who can take part in their private exchange contract. Each participating bidder receives a deal ID that expires soon, allowing them entry to the auction. The highest price wins, bidding occurs in real-time, and inventory is not assured, much like in an open auction.

    The private marketplace operates similarly to RTB, with the exception that advertisers may only access it via invitation. Publishers typically reserve a premium ad inventory for only a few select advertisers at a private or closed auction. Many DSPs have their own private marketplaces that are only open to DSP clients and users. Given the advantages it provides to publishers, websites and periodicals with wide audiences are the most common users of private marketplaces.

  3. Programmatic Guaranteed

Programmatic Guaranteed (also known as programmatic direct or automated guaranteed) employs open real time bidding auctioning platform. It allows direct trades by utilising deal IDs. A publisher utilises its SSP (supply-side platform) to connect to numerous programmatic demand sources in this sort of programmatic advertising. Because advertisers and publishers engage one on one to establish deals, programmatic guaranteed is akin to conventional media purchasing. Programmatic direct doesn’t use a bidding procedure, in contrast to the other media buying models we examined. Following the discussion, the inventory is sold straight to the advertiser. Advertisers have a variety of options with automated guaranteed, including ad inventory, costs, audience targeting, and frequency capping.

  1. Preferred deals

Preferred deals are completed automatically, making this a cost-effective and automated choice. Direct arrangements between publishers, advertisers, or agencies are known as prefered deals. Buyers and sellers can negotiate the terms of the transaction here. It enables sellers to issue a deal ID that buyers can use to immediately purchase merchandise. Preferred deals are completed automatically, making this a cost-effective and automated choice.

By selecting the prefered deals, you may buy ad space for a set fee, or “spot purchasing.” Before claiming the ad space, the advertiser and publication must reach agreement on the price, targeting, and other terms. If you want to see a preview of the available ad space from an advertiser, this option is fantastic.

In a Preferred Deal, publishers provide the marketer with premium inventory at a pre-agreed set eCPM pricing. Although eCPMs are a little more, marketers pay to basically have “first dibs” on exclusive ad space. Before the inventory goes to open auction, a marketer with a preferred deal has the chance to place a real-time bid at the pre-negotiated fixed eCPM price when an ad request comes in. There is no warranty on inventory.

Types of Programmatic Advertising

Publishers may effectively monetize core inventory via successful programmatic campaigns across all types of programmatic advertising. There are four main types of programmatic advertising: real-time bidding (RTB), demand-side platforms (DSPs), supply-side platforms (SSPs), and data management platforms (DMPs). Each of these plays a different role in the programmatic ad ecosystem, and understanding how they work together is key to effectively using programmatic advertising to reach your target audience. All types of programmatic advertising have their own pros and cons. Therefore, you must decide at the start which type of programmatic advertising do you need for your digital marketing.

Real-time Bidding (RTB)

Real-time bidding (RTB) is the process by which advertisers bid on ad inventory in real-time, through an automated auction. This technique is also known as programmatic media buying. When a user visits a website or app, the publisher’s ad server sends a request for an ad to an ad exchange. Advertisers then have a split-second to bid on the ad space, and the winning bid is displayed to the user.

RTB allows for highly targeted and efficient ad buying, as advertisers can bid on specific audience segments and placements. It also allows for more transparency in the ad buying process, as the winning bid is determined by the market rather than being negotiated manually. The bidding mechanism allows for the purchasing and selling of advertising based on ad impressions in an immediate auction.

Open auction (audience targeting) and private marketplace deals, which call for a private marketplace and permit fixed price and data overlays, are two forms of RTBs. To maximise their outcomes, more and more companies are using RTB into their advertising strategy.

Demand-Side Platforms (DSPs)

Demand-side platforms (DSPs) are platforms that enables advertisers to buy ad inventory programmatically, through RTB or other methods. DSPs provide a range of tools and features to help advertisers manage and optimize their ad campaigns, such as targeting options, bid management, and reporting. Today’s DSPs can manage both mobile and desktop inventories. There are ad formats that perform admirably on both mobile and conventional displays.

DSPs can be used to purchase ad inventory from a variety of sources, including ad exchanges, supply-side platforms (SSPs), and directly from publishers. They allow advertisers to reach specific audiences through targeting options such as demographics, interests, and behaviors. Advertisers may utilise a DSP platform to build highly comprehensive audience profiles and target the most appropriate ad impressions for each of their advertisements.

Supply-Side Platforms (SSPs)

Supply-side platforms (SSPs) are platforms that allow publishers to sell their ad inventory programmatically. SSPs provide tools and features to help publishers manage and optimize their ad inventory, such as ad formatting, pricing, and reporting. Publishers use a supply-side platform to manage their display space in a manner similar to how advertisers use demand-side platforms to handle their programmatic ad buying.

SSPs connect publishers with a variety of demand sources, including ad exchanges, DSPs, and direct advertisers. They allow publishers to sell their ad inventory to the highest bidder, through RTB or other methods.

Data Management Platforms (DMPs)

Data management platforms (DMPs) are platforms that allow advertisers and publishers to manage and analyze data about their audiences. Data management platform provides tools for segmenting and targeting audiences, as well as for tracking the performance of ad campaigns.

DMPs can be used by both advertisers and publishers to better understand their audiences and make more informed decisions about their ad campaigns. Advertisers can use DMPs to target specific audience segments, while publishers can use them to optimize their ad inventory and pricing.

Header bidding is becoming increasingly common in programmatic advertising due to its ability to increase revenue for publishers, provide better access to inventory for advertisers, and create a more transparent and equitable digital advertising environment. Programmatic Advertising is a part of the AdTech ecosystem, which is made up of the technological platforms that underpin contemporary digital advertising. The ecosystem also includes a number of programmatic media buying options, multiple ad formats, and other sorts of advertising transaction types.

Social media websites gather a tonne of user data to improve their targeting powers. This information is used by programmatic ads to select the audience, ad format, optimal timing, and frequency limits. Advertisers may optimise their ad spend with the use of this information.

Specific advertisers are boosting their spending on programmatic display advertising despite the uncertainty that still exists as third-party identifiers are gradually phased out. As marketers, ad tech platforms, and publishers work together to establish a new standard, programmatic will continue to gain ground in the years to come. Programmatic advertising has already got a firm place in display ads.

Programmatic advertising is a complex and rapidly evolving field, and understanding the different types of programmatic ad platforms is key to effectively using them to reach your target audience. RTB, DSPs, SSPs, and DMPs all play different roles in the programmatic ad ecosystem, and understanding how they work together is essential for success in the world of programmatic advertising. Always consider the forms of programmatic advertising before choosing one to assist you achieve your advertising objectives and choose which type is appropriate for you.