Media Insights

Definitions in the RTB and Programmatic Advertising World

In the world where only the acronym’s advance faster than the technology, we often have to take a step back and make sure we’re not interchanging our terms.  Much like people seem to interchange the terms Search, SEO, SEM and PPC – and yet never fully understand what they’re asking for, we’d like to lay out some definitions in the media buying space – specifically around the Programmatic and RTB space.

Programmatic media buying is ultimately the automation of the media buying process, usually through algorithms or another computerized methods.

Ad Exchanges are the place where remnant inventory from publishers are housed and made available for purchase through the programmatic technology.   Although there are many private exchanges which can be created directly between the publisher and marketer through the DSP technology, the major open market ad exchanges we work with include AppNexus, Google AdX, Pubmatic, Right Media Exchange, Facebook Exchange, Microsoft Advertising Exchange, and OpenX.  Please note, there are a lot more exchanges, including on the video side

Supply Side Platform (SSP’s) are the publishers technology that is utilized to place the inventory on the exchange and focus on yield optimization.

Demand Side Platforms (DSP’s) are the marketer and agency side platforms that were developed to purchase inventory off of the Ad Exchanges in a programmatic fashion.

Trading Desks are agency side platforms that run off of DSP technology, but strategies, bidding and optimization are managed by the in-house ad agency rather than a sales rep from the DSP side.

Real Time Bidding (RTB) is the service being performed by the DSP’s on the exchanges.  Although it’s often thought of as a way to just lower pricing, the function of RTB is actually just as much of a function of bidding on data in real time in order to secure the audience you’re after first.  So although you might be looking for cheap, auction-based traffic on the exchange, often times you’ll identify data sources or patterns that you’re willing to pay more money for.  One of those patterns or strategies would be:

ReMarketing or Retargeting – which is the ability to send a secondary message to someone whom you’ve previously messaged already.  An example of a remarketing strategy would be if a user came to my website and spent time shopping on the site, but never actually purchased anything.  I could then identify this person via 3rd party cookie (non-pii information) while they surfed the web somewhere else and an ad position on that page they were surfing became available on one of the Ad Exchanges, and via my DSP I could then serve them up another ad maybe with a message of “50% off for all first time buyers, today only!”.   Notice I didn’t get creepy on them and say “why didn’t you buy the red shoes I know you wanted”.  I was able to make the content relevant without giving the appearance of a stalker.

Data Management Platform (DMP) is typically a centralized location for 1st party and 3rd party data that allows you to aggregate all of the information to that one location with the ability of then utilizing it to target audiences on the exchanges or networks.  DMP’s are typically utilized as an add on to enhance your targeting capabilities.

As the programmatic advertising industry continues to advance, we’ll try and keep this list of definitions updated – but please let us know if there are others out there that you’d like defined or used in an example!


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