From the course: Programmatic Advertising Foundations

Programmatic terms and concepts - Adwords Tutorial

From the course: Programmatic Advertising Foundations

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Programmatic terms and concepts

- [Narrator] Programmatic terms and concepts. In this module, I'm going to introduce the primary components and players in the context of the Programmatic workflow. The best way to approach this is to look at who is doing the buying and selling of ads, and how they eventually meet. The buyer is the advertiser, marketer, or company that wants to reach users with ads. This is the Demand Side, and they use the DSP, or the Demand-Side Platform, to define their campaigns, load their creative assets, and manage bidding prices. From the marketing side, the marketers have identified their audience, uploaded their creative, a static image, different ad sizes, video, and also their bidding strategies for the ads to show to their intended audience. This is done through an agency, or an in-house team, at what is called a trading desk. On the other side of the system are the publishers. This can also be described as any website that shows ads to users. By showing ads, publishers monetize their content. They have users, or visitors, and need to show them ads, so they are considered Supply Side. So they use the SSP, or the Supply-Side Platform, to list their available ad inventory, ad sizes, and payment terms. A publisher relies on an ad server to provide ads for their visitors. Their ad server communicates to the Supply-Side Platform when an ad is needed. The platform communicates to the ad exchange to see what campaigns are targeting the user who's loading the ad. Publishers can utilize direct contracts, or agreements with certain advertisers, giving them priority. This is called Programmatic Direct. It works very similarly, but the pool of advertisers is smaller, and an automated system will choose and manage the campaign. A publisher can also opt to have a private exchange, where they only offer their ad impressions to a preferred advertiser or agencies. Through this, they can restrict who has access to their ad inventory. Another option is for publishers to utilize their ad server, or to go out to many different ad networks, or to the ad exchange. An ad exchange is where publishers can offer their ad inventory to the widest range of advertisers, and have transparency on prices. This enables them to maximize their potential revenue. If they have a lot of advertisers bidding to reach that user, it's a higher value for them. Ad networks are companies that connect advertisers to websites that have advertisements. There are also reseller networks, where a company buys ad space in advance, and then resells it with a markup. And this is called arbitrage, where resellers make money simply by purchasing low-cost ad space and selling it at a higher rate. Otherwise, in the ad exchange, advertisers compete against each other through real-time bidding. When an advertiser sets up a campaign, they bid on the amount of impressions. For example, they may bid $40 per 1,000 impressions. That is called CPM, or cost per mille. Mille is Latin for 1,000. In a real-time bidding process, advertisers can change and adjust their bids at any time, as the system is automated. And, of course, the highest bid wins the auction for that ad space. This is only a simple overview of the major players, functions, and terminology.

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