Contributed by Melissa Hefner, Director, Account Strategy, North Central Region at Goodway Group
Programmatic is changing advertising and has become the dominant way for digital advertisers to purchase media: According to eMarketer, 67% of display advertising, 69% of mobile advertising and 56% of digital video advertising were programmatic in 2016. But all of the tech talk around algorithms and data science has left some a bit confused about how it all comes together. In fact, over 67%* of CMOs do not entirely understand programmatic or how to apply it to their marketing campaigns. You might be asking yourself what’s the difference between a DSP and an ad network and how both are different from an ad exchange. We’re here to help define these terms and highlight the pros and cons of each method of buying digital media.
Defining Digital Media Buying and Selling
- Programmatic: Buying digital media in an automated fashion, usually through an exchange or a demand-side platform.
- Ad Network: A media company that sells inventory across a range of publisher sites to advertisers at a set price. Ad networks work directly with publishers to sell ad impressions that a publisher has not directly sold. It is not programmatic.
- Ad Exchange: A technology platform where publishers and ad networks sell their impressions to advertisers programmatically. It is an online auction for ads, similar to how E-Trade is an online marketplace for stocks. Ad exchanges work with multiple seller sources simultaneously to auction off impressions through real-time bidding or programmatic direct. Ad exchanges often connect to DSPs and SSPs, but advertisers can buy from ad exchanges directly.
- Demand-Side Platform (DSP): A technology platform that allows advertisers to manage, purchase and optimize programmatic inventory from multiple ad exchanges and SSPs through one interface. Inventory can be purchased through real-time bidding or programmatic direct.
- Supply-Side Platform (SSP): A technology platform that allows publishers to manage, sell and optimize programmatic inventory for advertisers to bid on. SSPs connect to multiple ad networks, exchanges and DSPs at once to maximize the opportunity to sell inventory.