In the era of digital transformation, e-commerce projects face growing competition and the need for more precise targeting of their audience. Programmatic advertising is one of the most effective tools for solving such problems. In this article, you will learn how programmatic advertising can be applied in e-commerce and evaluate ad exchange example that play a key role in successful advertising campaigns.
What Is Programmatic?
Programmatic is an automated purchase of targeted advertising on the websites your company needs in real-time.
Programmatic is very similar to the system on which the pay-per-click model is built: advertisers place bids, and the highest one guarantees a place in the sun. Programmatic is a great way to reach the target audience by showing ads on obviously winning sites for the brand. By choosing this approach, you spend resources and budget only on effective advertising that will be shown to the right people at the right time.
The automated process of buying advertising is achieved thanks to programmatic platforms equipped with so-called online bid managers, where bidding is carried out in real-time (RTB).
RTB is an advertising solution that is responsible for organizing an auction between sellers and buyers of advertising in real-time. The object of bidding at an online auction is the right to show an ad to a specific user. The basis of the RTB ideology is the maximum accuracy of selecting each target visitor. Many advertisers gain access to a large number of sites, placing their ads on them down to the last impression and determining the maximum price they are willing to pay per impression.
How Does Programmatic Work?
In fact, the process, mysteriously called programmatic buying, is quite simple. We have identified five steps in it. Before we talk about them, we suggest familiarizing yourself with the basic concepts related to the infrastructure of programmatic advertising.
DSP (Demand-side platform) is an automated platform for purchasing advertising inventory, allowing a media buyer to make purchases on multiple advertising exchanges through one interface, and manage different accounts and campaigns.
DMP is a data management platform responsible for targeting advertising in placement programs. With the help of this system, information (obtained from cookies) about users from different sites is usually collected, defining users into segments according to different rules. Precise targeting is achieved by constantly updating the data. To obtain more relevant information and high-quality audience coverage, DMP uses DSP.
SSP (Supply-side or Sell-side platform) is a platform for publishers to manage their own advertising inventory (ad impressions on their sites), through the sale of which the profitability of digital media increases. Here, traffic from different sites is collected. SSP connects to DSP to sell this traffic.
Ad Exchange and Ad Networks. The former are online exchanges where both the demand side and the supply side (including publishers, advertisers, agencies, DSPs, and SSPs) can buy and sell resources without intermediaries. The latter (the so-called advertising networks) are engaged in the inventory of publishers: they divide them by application categories, user demographics, and advertising formats. When buying programmatic advertising, you inform the advertising network about the criteria of your campaign, and it compares them with available resources.
So, programmatic buying usually includes the following steps:
Step 1. The audience visits a website or app and leaves their data in the form of cookies.
Step 2. This data is sent to the . There, the starting bid is formed (the minimum amount that the publisher ordered for 1000 impressions).
Step 3. The SSP comes to the DSP with the desired bid from the publisher. By this time, the Agency Trading Desk on behalf of the brands has already pre-configured the campaign parameters in the DSP: added ads, set up frequency caps, targeting, specified a daily budget, and the desired cost per thousand impressions.
Step 4. The auction begins. The DSP evaluates the value of an ad impression, consisting of a targeting and a budget, to answer the bid request, and sends a request to the Ad Exchange.
Step 5. Ad Exchange processes bids from DSPs. The winning ad (the highest bid) is shown to the target audience.
What Is Good About Programmatic For eCommerce?
Programmatic media buying has undeniable advantages over direct buying:
- Flexible and precise targeting.
- The ability to reach a large audience.
- Saving money. Here you will probably be surprised. The cost per thousand impressions, although different between different campaigns, is on average from $0.50 to $2, which makes programmatic not available to everyone. However, here we are talking more about how to avoid unreasonable expenses on advertising that your target audience may simply not see due to inaccurate targeting, as well as wasting your budget on paying for time and dozens of ineffective actions on the part of your employees.
Programmatic Platforms
Programmatic platforms exist to help brands effectively manage advertising campaigns. Some of them are DSPs, while others combine the functions of DSP, SSP, and DMP. Among examples of the most popular ad exchanges is Teqblaze.
Programmatic From Google
Google has managed to combine the various capabilities of programmatic advertising, thereby providing brands with a whole system of sites useful for placement, available within a single project.
Google Ads is a system for placing contextual advertising on Google pages and partner sites of the Display Network (GDN). In Google Ads, advertisers pay for displaying ads to users.
Adsense is a service designed to help website owners earn money from advertising on Google. Here, publishers rent out advertising space on their site and receive payment for it. In essence, Adsense is built into all Display Network sites.
It should be noted that neither Google Ads or Adsense can be considered programmatic, although all their processes are also automated. Google defines Display & Video 360 as the only integrated tool that helps creative, information, and advertising departments work together on any advertising campaign.
Conclusion
Programmatic advertising provides e-commerce projects with excellent opportunities for scalable and precise interaction with the target audience. Modern advertising exchange examples show that a business can achieve its advertising goals while minimizing errors and financial costs. If you are interested in entering the programmatic advertising market with your own solution, we recommend paying attention to TeqBlaze. The company’s experience is focused on creating solutions for various digital channels, including native, display, mobile in-app, video, audio, in-game, and digital out-of-home advertising.
