Programmatic Buying

Two hundred milliseconds is hard to imagine. This tiny fraction of time is two hundred thousandths of a second – about as much time as it takes to blink. Digital ad inventory is now traded in this extremely short increment of time, thanks to the availability of automation, data, analytics and real-time technology. Despite the instantaneous nature of the trade, this process is quite complicated and includes thousands of actions from the moment a web surfer loads a page to the moment she can actually see an ad.

It all starts the second a consumer loads their browser and clicks on a link. Sites that run paid advertising will automatically call up available inventory based on this trigger. If the ad space has been sold, then the ad is served. However, if it has not been sold, the process goes through a series of steps, which are all part of the programmatic media buying transaction (25% of the time ending in the inventory being unsold).

What is Programmatic?

Programmatic media buying is the fully automated process of buying and selling digital media using disparate data for precise targeting. Typically, this process is completed using algorithmically-driven trading systems with direct access to publisher ad servers, ad exchanges, supply side platforms, demand side platforms, trading desks and other auction-based electronic marketplaces, sellers and buyers. More often than not, this bidding process takes place in real-time (“RTB”).

Many advertisers, agencies and publishers are taking advantage of this new form of media trading, yet most people in the business do not have a firm grasp on how complicated the process is. Few players comprehend the full lifecycle of the ad impression because most only touch one small part of the wider ecosystem. To help illustrate the many layers involved, MediaCrossing has created “200 Milliseconds: The Life of a Programmatic RTB Ad Impression.” The infographic and related explainer video presents a big-picture view of the process in granular detail not covered previously elsewhere.

200 Milliseconds
(Click to enlarge.)

Ad Networks and Publishers

The reason that most players have a limited understanding of the full lifecycle of a real-time bidded programmatic ad impression is that very few players work across the entirety of this massive environment and, like a complex American football game, it is difficult to get a comprehensive view from any one perspective. For example, an ad network and a publisher work on very different sides of the playing field, and, therefore, have quite differing perspectives. However, having a full-field view can benefit these different parties.

The reality is that programmatic media trading has huge possibilities for advertisers, agencies and publishers. The countless players in this game can benefit from a bird’s eye view of the process, thus enabling everyone involved to make more educated choices and giving them a wider appreciation for the intricacy of the execution. The process might seem so simple, but there are many touch points involved between when a visitor loads a news article on Kanye West’s wedding and an ad for new dress shoes is served.

This 200MS graphic highlights a variety of different participants in hopes that this effort will explain where each sits in respect to others in this complex process. Hopefully, this viewpoint makes each of our players better poised to engage in the programmatic cycle. The programmatic environment supports many distinctive participants — DSP/DMPs, SSPs, media traders and so on —a rich stew in which makes value is exchanged with greater or less levels of transparency, efficiency and effectiveness.

This infographic and accompanying video 200MS, is meant to share perspective into the multiple levels and companies involved in programmatic media trading industry. 200MS is illustrative and not definitive. Think of it as indicative of the time and actions it takes for an ad to be monetized and served programmatically. There are many elements at play, and this process often takes slightly more or less time for completion.

This infographic is intended to be instructional and is only Version 1.0. It will change over time just as the programmatic media trading industry continues to mature. I encourage responses on ways to further develop this graphic and the accompanying video. I encourage you to discuss and to share this graphic with your co-workers and business partners. Feel free to spend at least 200 milliseconds doing so.

About Bill Lederer

Bill is the Founder, Chairman and CEO of MediaCrossing. Former divisional CEO and C-level global digital media operating and strategy executive with Kantar, WPP’s media, marketing and data services division. Previously, Board member, WPP Digital and Kantar Digital. C-level or Board roles at TNS, Rewards Network, Getty Images, (Founder), Minotaur (Founder). Analyst, Portfolio Manager and VP-Research with two leading institutional investment firms. Public and private company Director and University and non-profit Trustee. Author of three published books. Frequent public speaker. Digital innovation award winner past 15+ years including from the ARF and Smithsonian.



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