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AdClarityM A R K E T I N G I N T E L L I G E N C E

THE ULTIMATE GUIDE TOTHE EVOLUTIONOF PROGRAMMATIC BUYING

http://www.adclarity.com/

In this e-book, you’ll learn what programmatic buying is and what components or key players are necessary in order for programmatic to exist. Your journey will begin with the traditional media buying landscape and the transitions it took in order for programmatic to appear. You’ll learn about everything from the key players to the challenges facing the industry today and how Marketing Intelligence is the key to programmatic.

We hope you enjoy your read and look forward to answering any questions you may have.

Welcome to the Ultimate Guide to the Evolution of Programmatic Buying!

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Traditional WaysChapter 1

DSPs and DMPsChapter 2

SSPsChapter 3

Ad ExchangesChapter 4

RTBChapter 5

Programmatic DirectChapter 6

Mobile AdvertisingChapter 7

Obstacles & ChallengesChapter 8

Marketing Intelligencefor Programatic

Chapter 9

Conclusion

TABLE OF CONTENTS

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In the old times if an advertiser wanted to buy inventory from a publisher, they would do so manually and directly. This was a cumbersome and tedious process which involved negotiations, insertion orders, manual tracking, and long waiting periods (especially for premium sites). The benefits were so-so as the advertiser had to track the result of each site manually in order to see where they were performing the best. Additionally, because advertisers bought on a CPM model, they bought impressions in bulk.

Regardless who the user was, everyone was seeing the same ad. It was literally like a Jackson Pollack painting- finding the canvas you want to work on and just throwing all your paint on it, hoping that at least one drop reaches the right spot.

Advertisers and Publishers

TRADITIONAL WAYS

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CHAPTER 1

Regardless who the user was, everyone was seeing the same ad. It was literally like a Jackson Pollack painting- finding the canvas you want to work on and just throwing all your paint on it, hoping that at least one drop reaches the right spot.


Ad Networks

As time went on and the number of advertisers and publishers grew exponentially, it became impossible for publishers to sell most of their inventory and for advertisers to handle the direct media buying process. They would have to be in direct contact with thousands of publishers at a time in order to maximize their reach. Additionally, manually tracking all of these sites proved to be impossible. This issue paved the way for the ad network.

An ad network is a company that connects advertisers to a large amount of publishers. It acts as a type of broker between the publisher and advertiser, buying the unsold or remnant inventory of the publisher in order to sell it to the advertiser. The ad network had technology that enabled them to categorize the inventory, which they could package and sell to the advertiser. This benefitted the advertiser because it allowed for them to extend their reach to numerous publishers all at once and have their ads targeted a little better based on the categorization of the ad network. And rather than having to track the campaigns on the advertisers end, the ad network was now responsible for tracking and optimizing each campaign across multiple sites.

And history repeated itself.

As time went on, the number of ad networks grew and began flooding the market. This put the publishers and advertisers in another predicament. Now they had to spend time trying to figure out which ad networks would give them the best bang for their buck. It also meant that advertisers could be buying the same inventory on the same site more than once. Oh, and did I mention that the

ad network was taking a chunk of the ad profit from the advertiser?

And thus, the Ad Exchange was born.

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TRADITIONAL WAYS

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Simply put, an ad exchange is a technology platform that facilitates in the automated buying and selling of inventory, often through real-time auctions. Unlike an ad network, purchasing is not based on a CPM model, but rather per impression. An ad exchange is pretty much a giant pool of impressions that allows for advertisers to bid on each impression based on specific targeting criteria in real-time. This allows for the advertiser to make sure each ad they are serving is being served to the right person at the right place at the right time. With the ad exchange, the publisher is now able to gain more revenue by selling off more inventory, and the advertiser has greater transparency and control over their placement.

And although ad exchanges made things better, advertisers and publishers still didn’t have the tools and technology needed to really exhaust the full value and potential of ad exchanges.

So along came Demand-Side Platforms (DSPs) and Supply-Side Platforms (SSPs). Both of these platforms are very similar, but just serve different audiences. The DSP serves advertisers and the SSP serves publishers.

DSPA DSP is sort of the brain on the advertiser side in terms of the ad exchange. It is a platform for buyers which works with multiple ad exchanges, allowing them to buy from multiple sources of inventory. For the advertiser, it is the interface which allows them to manage their bids, create targeting criteria, aggregate all their user siloed data, do retargeting, optimize their campaigns in real-time, and have access to

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TRADITIONAL WAYS

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results and data from DMPs. It could be seen as a sort of ad network on crack without the huge mark-up and with automated technology capabilities. To sum it up, a DSP is a one-stop shop for advertisers; all they need to do is submit their ads and wait for the results.

SSPAn SSP is pretty much the equivalent but for the publisher side. Whereas the DSP’s goal is to buy ad impressions as cheaply and quickly as possible from the ad exchange, the SSP’s goal is to maximize the price of their impressions. The SSP’s enable publishers to have access to multiple ad exchanges, ad networks, and DSPs all at once, increasing the range of potential buyers.

So now you understand the key players in the programmatic buying ecosystem. And all programmatic buying is, is the automated process of buying or selling media. And this process is reliant on these key players in order for it to work.

TRADITIONAL WAYS

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DSPS AND DMPS

In the previous chapter, I mentioned that the DSP acts as the brain, while the ad exchange acts as the body. But the brain is composed of cells and neurons, both critical to the functionality of the brain. In this case, we’re interested in the thousand billion neurons that provide us with the capacity to reason, comprehend, and make decisions.1 So whereas the DSP acts as the brain, it still needs these neurons in order to have a purpose. And in this case, data management platforms (DMPs), are the DSPs’ neurons—they give the DSP access to tons of information and data.

We’ve established the very basic components that are necessary for the existence of programmatic buying. But we need to understand a few more in order to understand why things work the way they do and how they work the way they do. This chapter will specifically focus on the core and functionality of the DSP.


CHAPTER 2


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So what is a DMP?A DMP is a very intelligent technological platform that takes data from first, second, and third part data providers2 . It manages the data in an organized and meaningful manner so that the DSP can make the best purchase decisions possible on behalf of the advertiser.

First Party DataConsidered to be the most powerful and effective of the three types of data, first party data is owned data, which means that the data is based on what you, as the advertiser, has collected on your audience. It is directed at site visitors or existing customers and is usually accessed through pixels, tags, cookies, and can also include information from CRM systems or web analytics. It is a crucial component to unique advertising and retargeting which allows advertisers to leverage internal behavioral data to meet their goals.3

Second Party DataThis is the newest form of data which definitely has the potential to be the most powerful once it reaches its maximum capabilities. All second party data is, is somebody else’s first party data. It’s usually made available through an arrangement with partners or companies who have the same type of target audience. For example, a luxury female clothing company might partner with a luxury jewelry company in order to broaden their advertising reach. The consumer behavior and demographics should overlap, which would allow for the jewelry company to target the female clothing company’s audience and vice versa.

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DSPS AND DMPS


Example 2

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Third Party DataThird party data is the monster of all the data providers. It is pretty much all the data that isn’t in the realm of first party data. It’s not connected to the advertiser and is an independent party which gathers data from a multitude of websites, vendors, and, even offline. It can be melded with first party data to provide an even more targeted campaign or be used on its own. Third party data provides the advertiser with additional consumer behavior that is unattainable through first party methods. It allows them to paint a more colorful picture of a user in order to give them the best fitted campaign based on their behavior.

Someone came to your site to buy a TV and you placed cookies on their browser to track them and retarget them. But what are you going to retarget them with? With the help of third party data, you will be able to gain a more in-depth look at their behavior. For example, what if you knew they were also in the market for a Porsche? You would have more information about their income, type of lifestyle, type of image they would like to portray, and so forth.4 This could reinforce your decision to show them an ad, not just of a generic 42” TV, but of the most progressive high-tech luxurious TV out there on the market (also the most expensive).

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DSPS AND DMPS

Combining third party data with first party data


Example 2

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You’re a sewing machine company who wants to get new customers. You can find this consumer through third party data by seeing if the consumer had visited any sites related to your target audience, such as a sewing magazine or crafts website. Regardless if they visit a photo website or sports website after, you will be able to show your ad on the site because you know that they had recently visited a site that was correlated with your target audience.

So now we know the first step- how the DMP gets and imports its data.

What next?

Now the DMP needs to segment the data and normalize the data. All this means is that it has to find trends, and segment your audience based on consumer behavior (i.e. women in California between the ages of 18-27 who use iPads, etc.).

Next, the DMP combines step 1 (the accumulation of data) and step 2 (the segmentation of data) to send instructions to the DSP. The DSP then makes the decision on how much that impression is worth for the advertiser. And of course, the impression comes from the publisher’s side, or the SSP. But we’ll get to that step in the next chapter. For now, you’ve grasped a basic understanding of how the DSP functions. Next, you’ll see how the SSP functions and where the two meet.

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DSPS AND DMPS

Using isolated third party data


SSPS

This chapter covers the supply-side platform, or SSP. In layman’s terms, an SSP is the publisher-side equivalent of a DSP whose main goal is to maximize revenue for the publisher and, well, make their life a whole hell of a lot easier.


CHAPTER 3

How?In today’s online advertising ecosystem, there are a plethora of ad networks, DSPs, and ad exchanges. And if the publisher wanted to sell their inventory to them, without an SSP, it would be close to impossible to do this efficiently and effectively. Dealing with every platform individually would be an extremely manual and labor intensive process.

Publisher

DSP

Ad Network

Ad Exchange

Ad Network

DSP

Advertiser


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SSPS

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It would take months to do any sort of A/B testing to see who is bringing in the best results, require a ton of time from the media seller to negotiate, test, and run every single deal, and, it would be almost impossible to optimize their inventory as the market is so volatile, results that are not based on real-time are irrelevant. Oh, and did I mention that if they did want to do any sort of automatic optimization they would have to integrate some very heavy and complex technology into their server?

So the SSP comes along and says, “Hey! We can not only manage your entire inventory in an automated manner, but we can also bring you premium traffic, lots of traffic, take all manual labor off the table, bring you the technology you need, and, make you money!”

Publisher

DSP

Ad Network

Ad Exchange

Ad Network

DSP

Advertiser

SSP


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SSPS

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So now, all the publisher has to do is provide the inventory for the SSP and the SSP does the rest of the work. And this is where it gets very, very cool.

You see, there is a special and complex algorithm consisting of three main variables embedded in the SSP which decides who gets to win the impression. Think of it as a sort of multiple regression analysis and multiple correlation (R).

You have three variables and you want to see which variable has the highest correlation with the output, or in this case, the maximum revenue. And every single time an impression is put up for auction, the results change based on the values of the variables.

The three variables are:RTBPayoutsDMPs

RTBI’m not going to get into too much detail here, because I am going to explain real-time bidding (RTB) later on in the guide. But all RTB is, is the means in which an impression is bought and sold in real-time. This process takes place in an auction where it is being bid on. And just like in real life, the person with the highest bid wins the deal. So in advertising terms- the advertiser who

Uhh… WTF is a regression analysis?

A regression analysis is simply a way of using one variable, or an input, to predict an outcome. In a multiple regression analysis you use several variables to predict an outcome. And usually, after you run your regression analysis, you run a multiple correlation to see which variable has the strongest relationship, or correlation, with the output.

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SSPS

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places the highest bid on that impression wins the space to put their ad up! I want to make a note here: the highest bid through RTB is usually the winner. Probably 90-92% of all won impressions are based on the highest bid. However, we will be covering the other two variables as well because they are important and although not often, they do occur.

PayoutsPayouts usually only happen when the advertiser is buying on a CPA or CPL basis. The advertiser usually offers to give the publisher a certain percentage of the profit. In the case where there is a tie for the bid, the SSP will sell the impression to the third party who has the highest payout rate. This case happens very rarely, but the concept still exists as an option in this ecosystem.

The DMPHave you ever been at one of those booth games at a carnival where they give you a colored ball and you have to throw that colored ball in a matching colored cup? Easy enough. You know what the color is that you need to target based on the color of the ball.

But what if you didn’t know the color of your ball and you had to throw it in the correct cup? You would be aiming at literally nothing, with the hope that you may have gotten the ball in the right cup. So in order to win, you would HAVE to know what the color of that ball is.


SSPS

This is the role that the DMP plays with the SSP. The DMP in this case provides the SSP with behavior data about a certain user and “colors” or segments them. Now that the user’s color is known, the SSP knows where to direct their traffic to in order to increase the likelihood of success.

Confused?

Let me draw it out for you.

The SSP has contact with multiple ad exchanges, DSPs, and ad networks. It wants to get the ad that has the highest likelihood for a conversion. Without the information from the DMP, it wouldn’t be able to know how to segment the user and would just throw the impression at any DSP, ad exchange, or ad network. But with the information on the user, it would know which mediator would be the most applicable for this inventory to increase the likelihood of conversion.

Phew!

Ok, so you now understand the three major inputs that manipulate who wins the impression. And you also know that in most of these cases RTB wins. To sum it up, the SSP is a platform which helps publishers sell their ads to huge pools of buyers, more than they would have on their own. They do so primarily through RTB so that the publisher can get the most value and money for each piece of inventory.



AD EXCHANGES

CHAPTER 4

We already know how and why the ad network came to be. In short, there were so many advertisers and publishers in the eco-system, it was impossible for advertisers to handle the direct media buying process and it was impossible for publishers to sell most of their inventory. So the ad network came to be.

For advertisers, this was very good because it enabled them to extend their reach and reach a larger number of publishers through one platform. For small and medium publishers, this was also very good. This was because these publishers had a very hard time selling their inventory to advertisers and now they were able to sell their inventory as part of a larger package on behalf of the ad network.

Ok, so how does an ad network actually work?

Firstly, the ad network needed access to a huge audience. This audience was brought by the publishers, and along with it, an abundance of consumer behavior data. Next, the ad network would look at all the inventory it had aggregated and they would use an algorithm to forecast how much of this inventory would be available in the following months per each publisher. Next, they would aggregate this data based on segments, which they are able to do with the use of the consumer behavior data. They would then package this segmented data (based on things such as age, gender, demographics, etc.), mark them up, and sell them to advertisers.

It sounds fine…so what’s the problem?



AD EXCHANGES

Let’s start with the advertisers. First of all, most ad networks don’t want advertisers to know where their ads are getting published. This is for several reasons, the most important being that if you, as an advertiser, knew which publishers your ad network was working with, you would be able to pass the ad network and work directly with those publishers, eliminating the need for the ad network. Because of this, advertisers can’t identify which inventory works best for them. Next, because advertisers buy inventory in packages, and these packages often include both remnant inventory and premium inventory, advertisers can’t really know what the value of any single impression is and can’t really obtain too many insights. Additionally, because there is almost no transparency and advertisers don’t know what sites their ads are running on, they could be taking the risk that their ads are showing up on nefarious sites.

Publishers didn’t have it much better. The lack of transparency also ran on the side of the publishers. They were unable to identify which advertisers were bringing in the best results and had to take the chance that the ad network would bring in very low quality ads, which could in turn lower the reputation of the publisher’s site, decrease any likelihood of conversions, and so forth. Because publishers were working with multiple ad networks at once, they had to constantly be evaluating which ad network was bringing them the best results—this was a manual and time consuming process. And most importantly, ad networks, more often than not, were also working with a chain of other ad networks, buying and selling inventory from one another. Each one of these took a cut from the publisher leading the publisher to receive lower and lower revenue.

And let’s not forget the challenges the ad networks themselves had. Although their plan seemed to be seamless, let’s remember that there is no such thing as concrete forecasting. It is a prediction, not an accurate science. So of course, forecasting publisher inventory was often faulty. And because of this



AD EXCHANGES

instability, their packages were inconsistent and they were either overselling or underselling inventory.

So you see the problem. What started off as a solution turned out to be a little more detrimental to its key players than intended. And this is where ad exchanges came into the picture.

Ad Exchanges

An ad exchange is a platform which facilitates the buying and selling of inventory through real-time auctions. Unlike ad networks, which don’t work in real-time and sell inventory by the bulk, ad exchanges buy and sell per impression. This gives the advertiser complete control over each ad- they have specific criteria they specify ahead of time so that each impression is bought with a real purpose.

It eliminates the traditional methods that provoked wasted impressions. Now, they are able to choose exactly who would see their ad, where they would see it, how they would see it, and when they would see it. So not only would they get to choose each and every impression they are buying, but they also decide how much they want to pay for each impression and only pay for the impressions that they want.

Ad exchanges conduct auctions for every single impression and just like in real life, the highest bidder wins the prize. So now, rather than the publisher selling 10,000 impressions in one bulk package and not necessarily getting the best bang for their buck, each impression is auctioned off to the highest bidder, which ensures that the publisher is getting the maximum profit based on market values.



AD EXCHANGES

The key differences between ad exchanges and ad networksAlthough I assume most of you are starting to understand the key differences between ad networks and ad exchanges, it won’t hurt to reiterate them in this section.


Because each impression is sold to the highest bidder, there is high competition between the advertisers. If they know they want it they will try to outbid each other, raising the CPM for publishers.

Advertisers can now buy only the impressions that they are interested in. Rather than buying in bulk from ad networks, they have complete control over their impression buys which allows them to buy at a much higher price.

Transparency for all! Because ad exchanges provide both the advertisers and publishers with transparency and visibility, advertisers are now able to gain insights as to which were the best performing sites and help them optimize for future campaigns. Publishers are able to see which advertisers are driving the highest eCPM to their sites, giving them the insights they need to make better decisions regarding which advertisers they want to encourage to their site.

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The key differences between ad exchanges and ad networksAlthough I assume most of you are starting to understand the key differences between ad networks and ad exchanges, it won’t hurt to reiterate them in this section.

AD EXCHANGES

If you remember, when I introduced the ad exchanges, I said that they are a direct connection between advertisers and publishers. Ad networks, on the other hand, can work with multiple intermediaries, causing the distance between the advertiser and publishers. The problem with that scenario is that each middleman takes a cut of the profit, lowering the revenue left for the publisher. So ad exchanges create an environment for a more efficient relationship, enabling the publisher to make more money.

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CHAPTER 5

RTB

Programmatic BuyingWe established that in traditional media buying, the buying

and selling process was tedious, time consuming, inefficient, not promising, and didn’t necessarily yield maximum results for either the publisher or advertiser. And of course, everything was and is done manually.

All programmatic buying is, is the buying and selling of display ads in an automated manner using the technology that we covered in the previous sections. That’s literally all it is: making media buying an automated and much more efficient process. It’s a concept, an umbrella term that encompasses a whole world beneath it.

You may be super confused right now and think that there is much more to programmatic buying, which there is, but what you need to understand that the actual definition of programmatic buying is simple. I can’t reiterate that enough. The automated process of media buying. Period.

That being said, there are different types of programmatic buying, such as real-time bidding, or RTB, which I’m sure you’ve all heard of. We’ll get to this in a moment, but I’m going to drive you crazy and say this one more time:

PROGRAMMATIC BUYING IS THE AUTOMATED PROCESS OF MEDIA BUYING USING TECHNOLOGY.



RTB


Good. Now that we have that settled, let’s begin.

People often say that programmatic buying is a synonym for RTB. And now that you know the definition of programmatic, I am certain that you will be more than willing to understand that it’s not--real-time bidding is a type of programmatic buying.

So what the hell is RTB?

Real-time bidding is the buying and selling of ad space (per impression) in real-time through auctions held in ad exchanges, DSPs, or SSPs. RTB is not its own platform- it’s a type of technology that ad exchanges, DSPs, and SSPs integrate in order to perform these auctions.

Okay… so how does it work?

I’m going to give you the simplest version of how the RTB works. And keep in mind, this entire process takes less than 80 milliseconds, about 4 times faster than it takes to blink your eye. It all starts with the publisher. The publisher chooses an SSP to work with, such as Pubmatic, and places a tag in the ad space, or inventory, they want them to be in charge of.

A user goes to that publisher’s site and before the page even finishes loading, the request to fill that vacant as space has been sent to the SSP. The SSP finds out information about the user through its DMP. It gathers generic information such a demographics, time of day, day of the week, and so forth. Once all of this information is gathered, the SSP sends the request to the ad networks, ad exchanges, and/or DSPs it is working with.


RTB


The SSPs can distribute this request in 2 ways- round robin or simultaneously.

If you look at the infographic below, you’ll see how the SSP has connections with multiple platforms (DSPs, ad networks (AN), and ad exchanges (AE))

If the SSP decides to send the request in a round robin manner, that means that each of these entities will have a ranking based on priority. For example, the SSP could send the request to DSP1 and if the bid falls through, they’ll send it to AN1—it really depends on what their order of preference is.

Or they can send out the request to all of their partners simultaneously.

It’s important to note this because if you are an advertiser and you are working with a certain platform who works with a specific SSP that has traffic you want, you need to make sure that you are not on the bottom of their list in case they do a round robin. You need to be working with the highest ranking DSP, ad exchange, or ad network in the eyes of the SSP.

So the SSP sends the request over to its partners. And don’t forget, if they send it

SSP

DSP 1DSP 2

AE 1

AE 2AN 1


RTB


over to an ad exchange, the ad exchange could be working with several DSPs simultaneously. Each player on the buying side evaluates the bid according to their own algorithms and targeting parameters that the advertiser set previously. For example, the advertiser may have wanted to target men between the ages of 30-47 who have a high income. Or maybe, the advertiser only wanted to target people who surfed on luxury watch websites. Or maybe, the advertiser only wants to target people who were shopping on their site earlier. The possibilities can go on forever.

So if you remember, the DMPs are what provide the DSPs with behavioral data about a consumer. The DSPs are what make the decisions. So after the ad exchange sends the bid request to the DSP, the DSP makes a decision based on complex algorithms which decide if this user is relevant for the advertiser. If it is, then the DSP places a bid on the ad space (the maximum bid amount is set previously), and whichever advertisers places the highest bid wins the ad space. (It is important to note that not every bid is created equally. Sometimes, an advertiser will pay more for a bid when they know that the user is extremely relevant for them.) Then, the winner sends instructions on how to retrieve the creative to the ad exchange, which then sends it to the SSP, which then sends it to the publisher. And finally, the ad is shown to the user.

Benefits of RTBThere is absolutely no dispute- RTB is a much more efficient way of buying and selling media when compared to traditional media buying. Advertisers no longer have to work directly with publishers and negotiate. They no longer have to buy bundled packages with irrelevant impressions which lead to wasted ad spend. With RTB, they are able to have enhanced targeting capabilities, minimize wasted ad impressions, increase their reach


RTB


and frequency, have transparency to gain the insights they need to constantly optimize their campaigns, and choose each impression they want to buy.

Publishers have the same deal. They don’t have to waste time and energy trying to contact and manage negotiations with advertisers. They have access to a much larger audience of potential buyers. They have a higher likelihood to sell more of their inventory. And, most importantly, because advertisers bid on inventory, the publisher is receiving the maximum market value per impression. That being said, like all things great and small, there are no ups without the downs.

But I guess that also depends on whether the glass is half empty or half full.

So here’s the deal.

Before programmatic came around, advertisers cared about publishers. They cared about the publisher’s name, reputation, size, etc. Advertisers wanted to buy inventory space because of the publisher. And because of this, the majority of all ad spend was going to the premium publishers. No one had any interest in working with middle or long tailed sites.

premium publishers

middle & long tailed sites middle & long tailed sites


RTB


But all of this changed with programmatic.

Rather than obsessing over the status of a publisher, buyers began to shift their focus to the audience and this was a hard hit for premium publishers. You see, buyers realized that it didn’t matter if they were buying premium spots on premium sites if the user wasn’t relevant for them. All they cared about was reaching the right user at the right place at the right time, and buying from premium publishers just wasn’t enough.

A few things happened because of this.

First, premium publishers began to lower their inventory cost because they couldn’t compete with natural changes. However, because the amount of internet users increased exponentially, it sort of weighed out the situation. Their costs may have decreased slightly, but quantity increased immensely.

Secondly, because buyers cared about the audience, this gave a chance for the middle and long tailed publishers.

How? Through retargeting.

Buyers could now target their exact users on any site, no matter where it stood on the totem pole, through retargeting tactics. Their specific method of doing this is a little controversial, but it’s also pretty damn smart. It’s called data leakage. What buyers would do is this: they would buy ad impressions on premium sites (they would set their bid ceiling very high so they could win). And because the ad was being served through a third party platform, the buyer could drop a tracking code on their creative to cookie the user (without the publisher knowing). Once the lead was being tracked, they pretty much had no use for the premium publisher because they didn’t matter anymore. What mattered was where the user was going, and often times


RTB


they were going to middle or long tailed sites. So the advertiser would stop working with that premium publisher because they got the information they need and then they would immediately launch an RTB campaign that would look for the users with the cookies through various ad exchanges, DSPs, and ad networks. And once they found them, they could place a much lower bid (because it wasn’t a premium publisher) to reach them. So on the one hand, there is a huge debate on whether RTB is hurting or benefitting the publishers, but I strongly believe it is the latter. Yes, premium publishers have to lower their costs and deal with data leakage. However, with the growing number of users on the internet, they’re actually still making a profit.

Additionally, RTB sort of leveled out the playing field. It gave a chance for the smaller publishers, who no one would have even thought of before. The fact that the disparities between the big and medium-small publishers is decreasing is absolutely phenomenal and could only bring benefits to the ecosystem.


CHAPTER 6


PROGRAMMATIC DIRECT

You may have heard nuances of this term: programmatic direct, programmatic premium, premium direct, automated guaranteed, programmatic guaranteed, programmatic reserved, etc. They all mean the same thing, but for our sake, we will stay with the term programmatic direct.

We have understood that with RTB, there is no guarantee that you will get the ad spot of your choice. And we have also understood that there is no direct relationship between the advertiser and the publisher; they are always meeting through an ad exchange or some other mediator, sometimes multiple mediators. Something that I didn’t mention in the last chapter was that even though the RTB ecosystem provides transparency into the media buying ecosystem, it doesn’t provide publishers with the visibility they needed to understand why advertisers are buying their inventory. It also doesn’t provide advertisers with the actual site their ad appears on—only the category.

Programmatic Direct

programmatic premium

premium direct

premium directautomated guaranteed

programmatic guaranteed programmatic reserved


PROGRAMMATIC DIRECT


And we’ve also seen that in the reality of it all, although I argued that RTB is actually really beneficial for middle and long tailed publishers, it sort of screws premium publishers.

And the publishers are fully aware of this.

A few years ago, OpenX published a piece that included a section about how fair programmatic buying really is. They asked some leading publishers what they thought and most of them came to the same conclusion: advertisers have the advantage when it comes to programmatic.

In fact, here are some direct quotes from this paper regarding the issue:

As a premium publisher [I believe] the advantage goes to the advertisers that are buying our inventory at below market rates. Until the eCPM starts climbing to match direct sales eCPM, the advantage will never be to the seller.

Buyers are “calling the shots on price, and you play the game or don’t get the volume. Buyers are biased too much towards audience and not enough towards context.

Buyers benefit more because programmatic “allows them to use their first-party data to identify valuable audience and buy it cheaply, because the seller does not know the value.

Buyers are benefiting more, as they are able to get massive reach on top sites for bottom dollar. Meanwhile, publishers are playing catch up, and struggling to optimize the balance between direct sales and programmatic buying in their yield strategies, and in particular trying to limit CPM erosion.



And of course, the advertisers had their version, but to sum it up, they felt that the publisher side just wasn’t doing enough to fully maximize the potential of real-time bidding. So we see that although RTB is a stellar technology, it still has some faults and room for improvement. And we also have to remember that RTB is not the only way brands buy media. A lot of the top advertisers still prefer to buy directly from their premium publishers to guarantee their spot.

But if we remember from the first chapter in this series, the traditional direct media buying process is lengthy, tedious, and completely inefficient.

And this is where programmatic direct comes in.

So what is programmatic direct?

Programmatic direct is the automated process of direct media buying where the advertiser still buys directly from the publisher, but without the need for insertion orders AND giving them the transparency and insights they need to constantly optimize their campaigns in real-time. This type of programmatic means that when the advertiser buys inventory from the publisher, they are guaranteed that spot (unlike RTB which has no guarantee at all). And because it is programmatic and still involved in the programmatic world, DMPs still play a huge role in providing advertisers and publishers with the first, second, and third party data they need to enhance their targeting capabilities.

So now, publishers are able to work directly with advertisers and see exactly what they are looking for and why they are purchasing their inventory. This allows for publishers to find relevant advertisers, provide

PROGRAMMATIC DIRECT



more relevant packages, and promote their own premium inventory. It’s as if to say that now that the advertisers know exactly what they want, publishers can provide those wants with more guaranteed inventory than they would get in the auction place. Providing, of course, that the advertiser is willing to pay for it.

Another common notion is that programmatic direct is only about premium spots. But, something I strongly believe in is that premium is in the eye of the beholder. What may be trash to one buyer may be premium to another. It really depends on what the buyer is looking for and what they need. So really, in programmatic direct, there is a premium for everyone.

Let me try to break it down in simpler terms.

RTB had not yet managed to surpass the process of direct buying and selling of inventory. Why? Because larger brands still want guaranteed access to their premium inventory, and, well, RTB just can’t guarantee that. So let’s say an advertiser finds the perfect customer but loses the auction to someone who bid higher. It’s not the end of the world; the advertiser can easily track the user to find them again. But this time, they may not choose to go through an auction but rather do a guaranteed buy so that they can make sure to reach them.

Additionally, when it comes down to RTB, the most important factor for the buyer isn’t the publisher or the content on their site, it’s the audience, pure and simple. All they care about is that they are targeting the right audience, hopefully in a relevant manner, but not always promised.

With programmatic direct, the main factor is the actual site. Buyers want to know that the premium inventory they are buying ad space on is quality. Don’t get me wrong- the audience is still an extremely significant

PROGRAMMATIC DIRECT



player in the decision factor. However, programmatic direct provides the buyer with the possibility of providing their end user with an ad that is contextually more relevant. As an added bonus, buyers also get much more transparency and inventory control over their purchases. And of course, publishers are able to set their own prices, albeit much higher than RTB prices, and make a better profit for their premium goods. They’re also saving a ton of money on using an automated system over manual sales work. Look, at the end of the day, you pretty much get what you pay for.

In my opinion, programmatic direct is primarily for brands, not performance based advertising. It’s large brands and agencies who care about where their ads are seen. You can’t have a company like Nike showing up on a download or porn site just because the user they wanted is there. They have a reputation to maintain!

So how does it work?

All programmatic direct is, is the automated process of traditional direct media buying.

The advertiser works with a publisher to buy a packaged deal of premium spots and sites and all the IO’s, requests, briefs, etc. are done automatically via the platform. Don’t get this confused with an ad network, which packages inventory from multiple publishers. Rather, on a programmatic direct platform you choose the publisher you want to buy the inventory from. The publisher provides the advertiser with a package of inventory only from their sites based on the general targeting attributes that the advertiser has requested. And, most importantly, remember that this kind of buy isn’t user based. It’s like the old ways where an ad space bought shows up everywhere to everyone who opens the site. However, in this case, the advertiser has limited targeting capabilities (like 30-45 year

PROGRAMMATIC DIRECT



old men, only on sports sites, etc.). So if a brand bought inventory from Yahoo, via programmatic direct, and made a request that it would show only to women between the ages of 20-45 and only in the fashion category, it would show the ad to all women who fit that description in any fashion domain or subdomain of Yahoo.

Another thing that a lot of these publishers do with programmatic direct is offer a sort of one-stop marketing shop to the advertisers. Along with buying inventory for their ads, they also offer packages which include partnerships, sponsored posts, newsletter promotions, etc. If you are a large brand who is working with CNN or the Huffington Post, this is obviously a very appealing selling point. And of course, publishers can make a whole lot of money from offering these solutions.

Okay. So we understood what programmatic direct is, how it works, and why the advertisers and publishers both benefit from it.

What now?

I have an idea. How about understanding programmatic buying in the mobile ecosystem?

PROGRAMMATIC DIRECT


CHAPTER 7


MOBILE ADVERTISING

There is no way I couldn’t include a chapter about what’s going on in the mobile world. Unless you live under a rock, you must be aware of how big mobile advertising is becoming. Here are just a few statis-tics from around the web to demonstrate my point:

Okay, so I don’t need to keep reiterating the importance of mobile marketing. We all get it. But because we’re focusing on programmatic buying, I’m going to shove one more statistic in your face.

It is predicted that by the end of this year, mobile will surpass desktop display ad spending in terms of programmatic ad expenditure. To be more precise, or as precise as I can be in regards to forecasting, mobile will account for 56.2% of the total programmatic digital display ad spending by the end of 2015.8

According to Forrester Research, mobile display advertising will account for nearly 40% of all online display ad spending by 2019, up from 24.4% in 20145

By 2018, it is predicted that 2.7bn people on this earth will have smartphones. Take this into consideration with the fact that last year, 60% of time spent on the internet was spent via smartphones (and time spent on desktops declined by 20%)6

By the end of 2015, mobile advertising in the U.S. will bring in $400bn compared to $139bn in 20127


MOBILE ADVERTISING


The concept of programmatic buying, as we learned in previous chapters, is pretty much the same for the mobile world. Ad exchanges, SSPs, DSPs, etc. are all playing the same role, except that they’re focused on mobile, and the types of programmatic that are applicable for desktop display are still relevant for mobile. With that being said, there are a few key distinctions that must be made in regards to the mobile ecosystem.

Programmatic in the mobile world is still relatively novice. It sort of looks like what the desktop display advertising industry was 10 years ago.

In the mobile landscape you have the options of choosing in-app inventory, video inventory, or web browser inventory. Although video is a huge deal, I’m going to focus on the two main types: in-app and web browser

Native Advertising is a must.

When it comes to mobile, apps win.

When it comes to apps, Facebook wins. Big time.

Google and Facebook together make up almost 70% of the mobile ad market.

The cookie problem. Most mobile web browsers do accept first party cookies. However, different browsers behave differently with third party cookies, and, most importantly, cookies don’t exist in the app world.

Last, but certainly not least, is data. The types of data available on mobile are quite different from desktop data, enabling mobile marketers to try new targeting and optimization methods.

1

7

8

2

6

3

4

5



MOBILE ADVERTISING

Alright, let’s get started. Mobile marketers have two main ways to advertise: mobile apps and mobile web.

Mobile AppsJust to give you an idea of the significance of mobile apps, in 2013 80% of the time spent on mobile devices was spent on mobile apps. In 2014, this number increased to 86%, while mobile web browsing fell to 14%! 9 And I’ll give you one guess as to who is dominating the mobile app industry (hint: it’s number 5).

That’s right.

Currently, Facebook is the most downloaded app in the entire world, and touts its 1.9bn monthly active users, which continues to grow each month.

So why is this interesting to us?

Because in 2012, when Facebook first launched its mobile ad business, it made close to nothing. Yet, in 2014 it made over $12.47bn in revenue, and 69% of that revenue was attributed to mobile.11 And even more interesting is the fact that during the final few months of 2014, they served 65% LESS ads than the previous year… but the average costs of those ads was 335% higher.12 Pretty much the underlying rules for neoclassical economics. Cut supply down, demand goes soaring, prices fly through the roof.

How did they become so successful?

There are many factors to take into consideration when it comes down to understanding why Facebook is doing so damn well on mobile. But in my opinion, I think the two top contributors are native mobile advertising and Facebook’s retargeting capabilities.



MOBILE ADVERTISING

I’ll explain both of these in a little bit. Right now, we’re going to spend a moment talking about mobile web.

Mobile WebThe mobile web is pretty much like browsing the web on your desktop, just

on your mobile. It’s just much smaller, the site needs to be mobile responsive, and is usually touch-screen sensitive. It has quite a bit of convenient features that enable users to perform an action in a touch of a button (placing an order, dialing a phone number, etc.). Usually companies always go for the mobile website first because it doesn’t require building an app, builds up web presence, is instantly available, is compatible with almost every mobile device, and is just much easier to manage and maintain.

In regards to the mobile web industry, Google wins by far. However, although Google’s mobile search ad spending is around 65% (2014), it has been on a constant decline when compared to its 2012 figures of 83%.13

The reason for this is as discussed before, more and more people are going to their mobile apps over web browsers. Google stays pretty private regarding their mobile share and revenue, but what we do know is that they are aware of this decline and probably have some tricks up their sleeve, such as potentially acquiring InMobi, one of the biggest mobile ad networks in the world.

The Cookie ProblemSounds like an oxymoron, huh? Cookies are very important in the world of advertising, especially when it comes to retargeting. And although cookies work wonders when it comes to desktop, it’s a little bit of a different story in the mobile world.



MOBILE ADVERTISING

Mobile Web CookiesIn the mobile world, cookies exist ONLY on the mobile web and their reach is

very limited. And when it comes to accepting third party cookies, every browser behaves differently. I mean, Safari doesn’t even accept third party cookies and it’s one of the most used smartphone browsers. Two more big issues? Browsers don’t share cookies with each other and they reset every time you close the app session. Eeek.

Mobile App TrackingI’m going to start off with an analogy before I start explaining the mess with mobile app tracking.

Imagine there is a kingdom- one king to rule them all. There are tons of people living in the village who follow and report to the rules of the king. Things are in order. People may be living their own lives and doing their own thing, but in regards to the important stuff (food, income, taxes, etc.),

Source: iab

APPS (WEBVIEW)

1st Party Cookies

3rd Part Cookies

YES

NO

LIMITED

MOBILE SAFARI* BROWSER/CHROME

What does it mean?

Same cookie behavior asnline Safari.

• Click based conversions• View based conversions• Data synchs

What does it mean?

Cookie support limited tosessions in the same app.


What does it mean?

Cookie support identicalto most online browsers.


*Note that installed browsers can behave differently. E.g. Chrome on iOS will support 3rd party cookies.



everything is tracked, reported, and standardized. Things function.

This analogy represents cookies and tracking in the browser world.

Now imagine the same kingdom, but this time all the villagers also play the role of kings. Now there is one piece of land with hundreds of kings, each setting their own rules and regulations within their own castle and property. There is no one ruler to rule them all in this scenario- it’s literally a case where everyone makes the rules for themselves. And because this is the case, no one is collaborating with each other or giving other kings inside information on what’s going on in their own kingdom.

And this is what tracking looks like in the mobile app world.

MOBILE ADVERTISING



There is no such thing as industry standards in regards to mobile app tracking so every app is in charge of figuring it out in their own way. Additionally, apps cannot share their tracking data with other apps so their information stays siloed within their own app. You can imagine how difficult this must be for advertisers when they’re trying to track their users across different apps in order to do proper ad targeting.

Notice that I haven’t used the word cookies yet when talking about mobile app tracking. This is because cookies don’t really exist in the app world. Rather, there are alternate tracking methods used such as device fingerprinting, MAC addresses, Open Device Identifier Numbers, Apple IFA and IVA, and Android Referrer. I’m not going to get into all of these tracking methods, but here is a really great article from Search Engine Watch that talks about the pros and cons of each of them.

Okay, so you get the issue. Tracking is super inconsistent in the mobile world and makes it very hard for advertisers to do ad retargeting. Marketers must figure out a way to integrate all of these identifiers in order to have one major identifier they can use across all channels.

But of course, there are exceptions to this problem: Facebook & Google.

GoogleI don’t have much to say about Google that isn’t already known. They own everything. And because they own everything (like DoubleClick and Android), they have special benefits that allow them to overcome the technical challenges that many others face in the industry.

MOBILE ADVERTISING

http://searchenginewatch.com/sew/how-to/2257043/pros-cons-of-the-top-mobile-app-tracking-methods



MOBILE ADVERTISING

FacebookRemember when I said that the two biggest contributors to helping Facebook conquer the mobile app landscape are native advertising and retargeting capabilities? This is where we get to it.

Website Custom Audience (WCA)Do not get this confused with FBX. I don’t care about FBX and it’s not relevant for the mobile world at all.

What WCA does is that it allows marketers to target their audience through Facebook ads based on their own (the marketers) data which could have been taken from their CRM, first party data, email database, etc. This means that you can target people who have been on your website but aren’t your Facebook fans or other offline customers through Facebook.

So pretty much, you take your list of customers, potential customers, and anyone who visited your website and got cookied and upload it into Facebook. You can segment your visitors based on which pages they visited, what section of the website they were on, and so forth in order to show them highly relevant ads. Facebook creates your audience based on your list, and voila, you are able to do ad retargeting in the most extreme and precise manner without bombarding users with emails.

And as you know, relevancy is the key to positive ROI on Facebook. The more relevant the ad is to the user in their buying lifecycle, the more likely they will buy!

Am I the only one flipping out about this?

This is incredible! Facebook has more data than any other data platform in existence. It seriously knows EVERYTHING about you (probably more than you know about yourself) and to allow advertisers to have access to this



data through retargeting is just something else.

I think you’re starting to understand why I believe that retargeting is such a crucial component to the success of Facebook’s mobile domination.

Native advertising is pretty easy to understand and if you really want, I don’t mind writing about it more in detail in another article. But all you need to know is that native advertising is really, really big (like $8bn big), and that Facebook is really, really good at it. And once again, you shouldn’t be surprised. Because Facebook has the data to know exactly what they should be recommending and when they should be recommending it.

DataYou have a general idea by now of how and where data is gathered from. I’d like to mention one more very important characteristic unique to mobile, and that’s location-based data.

People go with their mobile devices everywhere, and that’s something advertisers can leverage big time. If you combine location-based data with other types of data (such as behavioral), advertisers can send even more hyper-targeted ads to their consumers that offer the right product at the right place at the right time.

For example, a retailer can combine a user’s purchase history with their location and send them personalized offers whenever a customer walks into a store.14

It’s the ideal situation for brands that want to be involved in their customer’s and prospect’s buyer journey.Okay, so we understood that programmatic is pretty much the same

MOBILE ADVERTISING



MOBILE ADVERTISING

when it comes to mobile, albeit in a much less mature stage. What really shakes things up is the uniqueness of the mobile advertising industry in and of itself. The technological limitations that mobile sets for itself makes it difficult for programmatic to function as it does in the desktop world.

We saw that mobile browsers and mobile apps are completely separate in terms of data, tracking, really anything. We know that retargeting is something that is very rare in the mobile world, unless you’re Google or Facebook. And we know that programmatic won’t reach its full potential unless things change.

Luckily, ad networks and other platforms are aware of this and are beginning to develop technologies which enable them to track users from app to app, collecting data and tracking information along the way.

And hopefully, they will be able to catch up soon. Because at the rate mobile is growing, players can’t afford to take their time.



CHAPTER 8

OBSTACLES & CHALLENGES

Everything in life has a yin and yang, and this includes programmatic. Yes, programmatic has made some revolutionary changes in the way media buying is done that benefits the entire online advertising ecosystem. But with it also comes a new type of black market where nefarious people take advantage of human error, the rise of automation, and the decline in human to human communication. The most common type of fraud, and often synonymous with the

term, is non-human traffic aka bots. We will definitely be focusing on that in this post, but I will also take note of some less popular fraud types which are also extremely detrimental to honest players and the integrity of the industry.

Non-Human Traffic & Bots (Click Fraud)

It’s easy to understand why non-human traffic (from this point on we’ll call them bots) tops the list of concerns for advertisers and brands; they currently account for 90% of all fraud in the online advertising industry. Advertisers are paying and expecting that their ads will be viewed by actual people who might potentially buy their product. However, this isn’t always the case as bots account for about 11% of all display ad views.15

Bots are computer software applications driven by code which impersonate human behavior. They are pretty advanced and can be very hard to detect, especially as they have become better at mimicking user behavior throughout the years.

The type of fraud that bots engage in is called click fraud, which occurs when the bot clicks on an advertisement to drive up costs for the




advertiser without ever having the intention of conducting business with them. Keep in mind that bots aren’t humans- they can run forever and at an extremely high pace.

There are different types of bots such as PhantomBots, which travel around the web viewing and clicking ads, DeceptiBots, which can mimic a human’s behavior, and VaderBots.16

VaderBots are the most intrusive to users because they corrupt PCs and infect them with a malware which conducts click fraud based on the user’s behavior. There is a really great infographic that the iab made which shows just how easy it is to become a victim of traffic fraud:17

Source: iab



Ad Injections

Ad Injections have a very interesting story. You know when you download some file or app off the web and it makes you “run” and “install” about a million pop-ups and have you “read” their novel on terms and conditions (which we never do)?

Well, often times when you download apps off the internet, they will bundle themselves into an installer which will persuade you to install additional programs onto your computer. This is where not reading the terms and conditions or the pop-ups and just clicking “next” “next” “next” come in. So really, when you think you’re getting what you were looking for, you are… but you’re also getting much more than you expected.

I don’t know if you’ve hear of this little bastard, but I’m talking about ad injectors.




You see that ad on Dell’s site that’s outlined in red? Take a moment and think about it. Do you really think that Dell acts as a publisher? Would Nike host ads from retailers on its site? Or Apple? I think not.

This is what ad injectors do; they inject ads onto sites without permission and without the publisher ever knowing. And therefore, without ever paying the publisher.

Another exampleSo let’s say you’re searching for boots on Google.


boots



Instantly, Google will come back with results. But in even less time, the ad injector will push forth its own ads and replace those that paid for Google Ok, so who gets paid here?

Normally, the money would go to Google, right? But Google isn’t making any money here. Why? Because the ads were never put up by Google in the first place. The ads belong to an entirely independent third party service who hijacked the Google search page and placed their own ads as a way of making money. So let’s reiterate this- the ads on Google have not actually been placed there by Google!

Why do advertisers do this?

Well, this is a very attractive scheme to advertisers because now they are being offered inventory in places they would have never been offered before! For example, not too long ago, a Target ad actually showed up on Walmart’s homepage. If that’s not a shocker, then I don’t know what is.

Why do Ad Injectors do this?

On one hand, ad injectors could sell inventory directly to the publishers. In fact. If the price is good enough, advertisers may even say yes. It would indeed be more appealing to advertisers as these ad injectors would be able to offer up space that would otherwise be impossible to attain i.e. Walmart or Apple. Additionally, the spots on the page (above the fold, main banner) would definitely be an attractive aspect to advertisers.

But this isn’t what ad injectors do at all. Rather, they work through an intricate and complex web of ad networks, exchanges and other mediators. There are many benefits to these mediators, the strongest being the ability




to increase efficiency. However, because these webs are so complex, the advertiser may be going through 3 or 4 mediators before getting to their publisher. The advertiser may never even suspect that they are going through an ad injector!

Impression Fraud (Ad stacking, Ad Stuffing)Ad stacking is another very common form of fraud. It occurs when publishers stack ads on top of one another, and even though only the top ad is shown to the user, advertisers think that their ads are also getting shown. The image below shows an example of an ad blocker showing how many ads are being served on the page or being attempted to being served on the page.





They do this by placing ads in invisible iframes with zero to zero pixels and zero visibility. This way they can load lots and lots of ads on the page. Furthermore, publishers can use bots to load the pages so that the ads get “viewed,” costing advertisers for each impression “viewed.”

This enables publishers to sell a huge amount of inventory on ad exchanges, which are sold but never seen.

Fake Sites & Domains

This one is pretty basic and is exactly what it sounds like. These are fake websites built just for advertising which offer no content that anyone is interested in. They usually are integrated into a complex web of other sites and are part of a larger network so that they don’t rouse suspicion. And just like impression fraud, they can use bots to load and reload the page, making it look like they have traffic and costing the advertisers money for useless impressions.

Ad ViewabilityThis isn’t a type of fraud. Rather, I see it more as a challenge that is currently being acknowledged by key players in the industry.

In the past few years, statistics about display advertising have been a hot topic. Why? Because the figures are shocking. For example, did you know that you’re more likely to survive a plane crash than click on a banner ad? Or that you’re more likely to get into MIT or Harvard than click on a banner ad? Eeek! For someone who lives and breathes the digital advertising world, these are horrifying statistics. But what I think is even more daunting is that while global display ad spend is expected to reach over $70 billion in 2016, over 56% of all ads served are not actually viewable!




So what makes an ad viewable?

According to the IAB, at least 50% of an ad must appear in the user’s browser window for at least 1 second, and in the case for videos, at least 2 seconds.18 That means if your ad shows up on someone’s browser, but is placed below the fold, and the user hasn’t scrolled, there is no ad viewability. To put it simply, just because an ad is served doesn’t mean it’s viewed.

Although all of these challenges did exist in the pre-programmatic era, they have been exacerbated by the current conditions of the industry, specifically the decline in human to human contact. Fraudsters can easily hide their identities and motives to remain undetected by brands and ad exchange. In order for programmatic to overcome fraud, an audit trail must be incorporated in the supply chain. There must be more transparency in the system and a way to recognize if players participating in the programmatic game should be there in the first place.


I could not conclude this e-book without essential tips and tricks as to how you can enhance your media buying strategies in regards to programmatic buying. And the key to programmatic buying lies in Marketing Intelligence.

What is Marketing Intelligence?Marketing Intelligence is the process of gathering all the world’s online media data and presenting it in a useful and accessible way to allow for better decision making.

Marketing Intelligence for Media BuyersI am about to show you exactly how you can use Marketing Intelligence to overcome your programmatic buying challenges as an Advertiser or Agency.

In the next few examples, I will be presenting several different brands from different industries in order to demonstrate the broad range of advertising information that you can extract from AdClarity, the essential tool for digital advertisers and media buyers.

In this scenario, let us assume that we are a mid-size advertiser in the travel industry. If I want to make sure I am targeting the right publishers, I can do so by monitoring my competitors and top influencers in the industry to find out what works best for them.

Challenge 1


CHAPTER 9

MARKETING INTELLIGENCEFOR PROGRAMMATIC

Discover the Most Successful Sites to Advertise On


Let me show you how:As an advertiser within the travel industry, I will use AdClarity to look up TripAdvisor, my industry leader and uncover their online marketing strategies and advertising tactics to create my own successful banner ad campaigns.

In addition to seeing which publisher sites TripAdvisor is advertising with, I can filter the sites according to "highest share of voice” to see which publishers they are working the most with and therefore spending most of their display ad budget with. I can also assume that the most invested sites are deemed to bring in the best results because TripAdvisor is not likely to be wasting such a huge amount of their budget on sites that they know are not working for them.


MARKETING INTELLIGENCE




Challenge 2 Optimize Your Banner Creatives and Campaign Messaging

The search results here bring up a long list of successful publisher sites who are pursuing the same target audience as I am. Therefore I can guarantee that there are several sites on this list which I haven’t even thought about advertising with, and now I can expand my reach to find new target audiences.

None of the above matters if you’re not able to speak to your audience. And the way you speak to your audience is through designing a creative that communicates, resonates, and interacts well with your target audience. But which creative is guaranteed to work?

In order to get an idea of what kind of creative design and messaging you should be using, take a look at what is working (and what is not working) for your competitors and industry leaders. This time I am in the financial industry and I need to figure out what kind of call-to-action, banner ads and landing page design my creative needs to have in order to generate the highest conversion rates.

All I need to do is uncover American Express’ online advertising tactics to see which creatives are most successful for them and build off of their campaigns to create my own ultimate campaigns.


Challenge 3 Finding the Most Relevant Mediators



Find the most relevant Ad Exchanges, Ad Networks, Ad Servers, DSPs, and SSPs that will lead you back to your favorite publishers and other similar publishers who target your ideal audience.

In this scenario, let us assume that we are a brand in the automotive industry who wants to advertise on turbododge.com, an online publisher site that deals with the automotive industry.




By using AdClarity to discover which mediators (ad exchanges, ad servers, ad networks, SSPs, and DSPs) turbododge.com is working with, I am able to know who I need to out to in order to advertise with them.

Additionally, I can assume that publishers in the same industry as turbododge.com are most likely using the same SSPs. I should therefore make sure that the ad exchange I am working with works with that specific SSP or that I’m using the SSPs that are most relevant for me.

I can also use AdClarity to figure out which DSP I should be working with. By using Marketing Intelligence to uncover which SSPs and ad exchanges a DSP is working with, I can see which DSPs have access to premium inventory and if other advertisers they are working with are in the same industry as me.




If I want to dig a little deeper into that last step, I can use AdClarity API to evaluate the ad spend of my competitors and what they’re bidding for inventory on a publisher site I'm interested in. In order to get the ad spend, I calculate all the publishers they are working with, how many impressions they bought from each publisher, and what the CPM is of each of these publishers.

Marketing Intelligence for Media SellersIn the next few examples, I will be using several different companies

from different industries in order to show you the broad range of information that AdClarity has access to.




Challenge 1 Finding the Relevant Mediators

Find the relevant ad networks, DSPs, and SSPs that will lead you back to your favorite advertisers and other relevant advertisers in order to maximize your advertising revenue and access thousands of advertisers that wouldn’t have bought directly from you.

In this scenario, we are a publisher who wants to work with Travelzoo.

By using AdClarity to discover which mediators (ad exchanges, ad servers, ad networks, SSPs, and DSPs) Travelzoo is working with, I am able to know which mediator I need to be in contact with in order to work with them.




Additionally, I can assume that advertisers in the same industry as Travelzoo are most likely using the same DSPs. I should therefore make sure that the ad exchange I am working with works with that specific DSP or that I’m working with the DSPs that are most relevant for me. This will help me find advertisers that will yield results from my site and will continue running their ads with me.

I can also use AdClarity to figure out which SSP and ad exchange I should be working with. By using Marketing Intelligence to uncover which DSPs and ad exchanges an SSP is working with, I can see which SSPs have access to premium advertisers and if other publishers they are working with are in the same industry as me. By making sure I have access to top




of the line advertisers, I can maximize my revenue by knowing that premium advertisers are trying to outbid each other for my premium inventory. Additionally, AdClarity shows me the eCPM of my competitors so that I can see what my inventory is really worth and whether my price floor is too high or too low. If it’s too high, I’ll know to lower it so that I won’t be missing out on advertisers. And if it’s too low, then I can raise it and maximize revenue.




In conclusion, Marketing Intelligence lets you gain complete visibility and transparency onto your competitors advertising tactics and monitor your entire ecosystem to build on their success and avoid their failures.

Your competitors have spent an exorbitant amount of their budget on testing and trying to figure out what brings them the best results and these insights will allow you to easily work off their successes.


CONCLUSION

CONCLUSION

Programmatic buying is indeed the renaissance of traditional media buying. And like all good things in life, it shouldn’t be something that is taken for granted. Programmatic brings a lot to the table in the online advertising industry, yet its complexity and esoteric nature requires all participants to really understand what it is and to stay up to date with the latest innovations. Each player discussed in this guide plays a key role in the functionality of programmatic and none should be overlooked. As the technology behind programmatic continues to progress, the programmatic industry will keep evolving. And as this unceasing evolution continues, it will eventually address and hopefully overcome the challenges and obstacles facing the industry, providing an optimal media buying and selling environment for all parties involved.

We hope you enjoyed your Ultimate Guide to the Evolution of Programmatic Buying. If you have any further questions or would like to learn more, don’t hesitate to contact us at [email protected]

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CONCLUSION

Sources:

1. http://www.nlm.nih.gov/medlineplus/ency/anatomyvideos/000016.htm

2. These data providers are also applied to publishers, but for now we are focusing on advertisers

3. http://www.business2community.com/digital-marketing/retargeting-role-first-party-data-01132664

4. http://www.business2community.com/big-data/benefits-potential-pitfalls-third-party-data-0604309

5. http://blogs.wsj.com/cmo/2014/10/06/forrester-us-online-display-ad-spending-will-nearly-double-by-2019/

6. https://econsultancy.com/blog/66202-more-reasons-why-marketers-must-move-to-a-mobile-first-ad-strategy/

7. http://www.highervisibility.com/12-mobile-statistics-to-get-you-amped-for-2015/

8. http://www.emarketer.com/Article/US-Programmatic-Ad-Spend-Tops-10-Billion-This-Year-Double-by-2016/1011312

9. http://www.forbes.com/sites/niallmccarthy/2014/10/29/mobile-app-usage-by-the-numbers-infographic/

10. http://www.adweek.com/socialtimes/facebooks-q4-2014-mobile-is-now-69-of-ad-revenue/613826

11. http://adage.com/article/digital/facebook-s-mobile-revenue-hits-2-5-billion-prices-soar/296869/

12. http://finance.yahoo.com/news/why-google-losing-mobile-search-130007811.html

13. http://searchcrm.techtarget.com/feature/Location-based-apps-present-opportunities-and-data-challenges

14. http://www.adweek.com/news/technology/7-things-you-need-know-about-bots-are-threatening-ad-industry-161849

15. https://econsultancy.com/blog/63818-what-is-click-fraud-and-how-can-you-prevent-it/

16. https://www.exchangewire.com/blog/2014/05/29/the-truth-about-online-ad-fraud/

17. http://www.iab.net/media/file/IABDigitalSimplifiedUnderstandingOnlineTrafficFraud.pdf

18. http://www.iab.net/iablog/2014/03/viewability-has-arrived-what-you-need-to-know-to-see-through-this-sea-change.html

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