Basics of Programmatic Media Buying

How the programmatic Media buying is different than the Traditional one? This would be the most obvious question in any one mind who is looking to learn about Programmatic Media Buying. Answer is simple like as mentioned in name when Media Buying happens with very less human interactions i.e automatically such kind of Media Buying is termed as Programmatic Media Buying. Just to put more context traditional media buying earlier used to happen directly between  Publisher and Advertisers. Both parties will agree at a flat rate then sign agreement (I/O order) and advertisement will go live on publisher website.

Now this type of arrangement may work for large incorporations whose business objectives are very broad or may be publisher quality is tested in past hence trust factor will play a role. Think about Flipkart (Advertiser) and Hotstar (Publisher). If they worked in past and “trust” factor is available. Instead of buying inventory on Hotstar through Third Party platforms (DSPs), it would wise to have direct relations. isnt it? But such kind of relationship (traditional) are difficult to manage & measure. Think about a situation if Flipkart is working with 100 such publishers! So practically if a business need flexibility and scale traditional media buying is NOT the best way to manage relationship. Plus cost benefit analysis of Human resource required to manage such an operation would be Negative! Hence you need tools/algorithm and Intelligence manage these things. All these together can be termed as Programmatic Media Buying. This kind of media buying happens with a process called RTB ie Real Time Bidding.

Traditional Way :

Advertiser ->Publisher (Direct relation I/O based)

>>  FIX or FLAT rate based mostly Impression Buying

>> works only for big Advertisers/Publishers


Programmatic Way :
Advertisers->Third Party Platforms (DSPs/SSPs/Exchange/DMPs)->Publishers

>> Flexible rate based /more targeting options/Multiple ways to buy : CPM/CPI/eCPM/GRPs/CPP/CPA

>> Can aggregate multiple small publishers.

>> Sold/Unsold Inventories can be better managed with higher Fill rate.

GRPs : Gross Rating Point calculated as % of Market Reach X Frequency. This means that if you are running a campaign which is at frequency 4 and reaching 30% of the market your GRP would be 30X4=120


DSP : Demand Side Platform works with advertisers like Google Double Click manager (DV 360).

SSP : Supply side platform works with publishers like Appnexus. They also aggregate small publishers. There are many SSPs, Technology is most important factor.

Exchange : is like escrow account which connects DSPs and SSPs.

DMP : They got user data with a lot of targeting option works closely with Advertisers/DSPs to enable right audience for them.

Flow chart :

 Publishers-> SSP – > Exchange <- DMP <- DSP <- Advertisers

Exchange is the place where actual transaction will happen.

Targeting Options :

Advertisers Need : Age/Gender/Location/Publisher/Content etc

Publisher Offers : Age/Gender/Location/Publisher/Content/Device Ids/IP address/Bundle Id/Ad Location/PII

Popular DSPs :


1 DoubleClick Bid Manager
2 Amazon Advertising
3 Sizmek
4 Oath DSP
5 Adobe Media Optimizer DSP
6 theTradeDesk
7 MediaMath
8 Adobe Advertising Cloud
9 AppNexus
10 DataXu

Popular SSPs :

  1. DV 360
  2. OpenX
  3. Sulvo
  4. Setupad
  5. Rubicon Project
  6. Appnexus
  7. Vertoz
  8. Xapads

There are multiple ways/format to buy Inventory (advertising space) on a publisher website. One of them would be Native Advertising.


Types of Integration :

  1. RTB : API based, takes time but useful for long term.
  2. Tag Based : Fastest,Easy to implement, difficult to manage.
  3. SDK : Most effective way, gives most accurate data.

Things You should know : (Tech Jargons)

  1. Responce rate
  2. Win Rate
  3. Fill Rate
  4. eCPM
  5. Floor Rate

InHouse or Outsourced :

Inhouse is not recommended. It would be wise to outsource to agencies with hard metrics. You should consider building a team only if your Annual Budget > 24 Cr. Anything less is for agencies, they have right expertise, relationship with partners and leverage to manage your campaigns. However these are my own thoughts you can do cost benefit analysis to take your own call. 🙂

Basics of Programmatic Media Buying

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