Programmatic Advertising : Ecosystem of Ad Serving

Let's start from the basics, how a Programmatic Ad is served to a user. 

Some of the basic definitions, from Programmatic Advertisement, are underlined:

Publisher: The owner of a website where the ads will serve

Advertiser: The owner of a product, who wants to serve an ad to communicate with the users/ audience for the purpose of selling a product or raising an awareness

Agencies: A group of highly trained professionals, helping the Advertisers to setup and deliver their campaigns conveniently.

Vendors: Can be third party ad servers, or third party traffickers, who help the Publishers and advertisers to traffic their campaigns, manage the accounts, share reports and monetize

Ad Tags: A piece of code/ snippet, which redirects to an ad server, calling to serve an image/ video as an ad

Here we go:

1. Ad tags, from the ad servers (like Doubleclick for Publishers / Google Ad Manager), are placed on the source code of Publishers web page
2. User enters the URL in the browser
3. Browser calls CMS (content management system) for the content of the page
4. CMS responded with the content of the page along with the Ad Tags
5. Immediately, browser compiles the ad tags and calls the Ad server for an Ad
6. Ad tags make a request to the Ad server and gathers the information like: IP address, cookies
7. The ad server creates a list of matching ad and filter out the odd ones, based on the matching criteria of the incoming ad call and ad targeting settings
8. Ad server runs an Ad selection process, considering and selects one matching ad
1. Now there are two types of ads : Guaranteed and Non-Guaranteed / remnant 
2. The ad server will first look at the Guaranteed ads (Reserved inventories)
3. If there aren’t any matching Guaranteed ads, it will look for Non- Guaranteed ads (like house ads) for fulfilling this specific inventory (ad slot)
9. Now, Publisher wants to maximize the revenue of this specific remnant inventory by inviting other Advertisers to take part in the ad serving process, in order to serve an ad. So, they will take help of any SSD (Supply Side Platform), which includes Ad exchanges (like Appnexus / Xandr, DoubleClick AdeXchange, etc), or Ad Networks (like AdSense). Here, in the SSP itself, all of them (ad server, ad exchange, ad networks will compete with each other)
10. Once the ad gets selected in the ad server, it will initiate a request to the Ad exchange to look for more budgeted ad, if available. It’ll forward all the details of the ad call and the budget of the winning LI from the ad server
11. 11. At the Ad Exchange level, Adsense and all other ad exchanges will start competing 

Here comes the picture of a DSP (demand side platform), like : DBM (Doubleclick Bid Manager/ DV360/ Google Marketing Platform), MediaMath etc. 

It allows buyers of digital advertising inventory (like advertising agencies or advertisers) to manage multiple ad exchange and data exchange accounts through one interface. Real-time bidding for displaying ad takes place within the ad exchanges, and by utilizing a DSP, marketers can manage their bids for the banners and the pricing for the data that they are layering on to target their audiences. Usage of DSPs also ensure brand safety measures for the advertisers, so that their ads shouldn’t show up on illegal sites or pornography contents, or next to irrelevant contents, by page level and category level targeting, keywords, URL targeting by both DSP and ad servers.

12. So, Ad exchange will now forward the ad call/ Bid request to the linked DSPs

13. In DSP (Demand Side Platform like DV360 or GMP) also, advertisers or agencies will traffic their campaign and will wait for the ad call from an exchange to serve an ad

14. All DSPs will run an ad selection process, select one with the matching criteria, and the highest bidding ad and respond back to Ad exchange with their ads

DSPs can also be linked with Adwords to serve display ads from the advertiser's adwords account. Or they can also run Youtube Campaign, to run a Youtube video ad on any popular video.

15. In Ad Exchange, one single ad from different DSPs, one ad from adsense and one from all other exchanges will compete with each other

16. The winning highest paying ad will compete with the winning ad of the Ad server. Whoever wins, will served

17. Once the user views the ad, it will be counted as an impression, and the viewable percentage will also be recorded (in ad server, exchange, DSP and 3pas / 3rd party ad server)

18. If the user clicks on the ad, a click will be counted, and the creative will redirect to the landing page of the Advertiser.

19. Once the user landed on the page, a pixel will be fired, a cookie will be dropped in the browser. This cookie will help to collect this user as an audience in the audience list.

20. Later the audience list will be used again by the Advertiser/ Publisher to target a relevant ad to the users, based on the demographic and other details.

21. If the user buys one item, Hurray! one conversion is successful

22. This ends the motto of the Publisher and the advertiser in the complete ad serving process. Wherein, Publisher earns for serving the ad, advertiser earns user base details followed by selling a product

3rd party Ad server: 

At the DSP side, they (advertiser/ advertising agency) might tie up with any 3rd party ad serving platform (like DCM, Sizmek) for sophisticated ad trafficking and media planning, granular reporting, pixel implementation, centralized creative management, audience engagement, etc. 3pas servers can also create pixels (impression/click tracker or conversion pixels) for helping in the reports and remarketing audiences. 

So, Advertisers can traffic their campaigns in these 3rd party ad servers, pull the ad tags and traffic it in the DSPs as an Ad. Thereafter, DSP will respond back with this 3rd party ad call to the exchange (with the bidding price) as an ad; if it wins and serves on the page, browser will call the third party for serving the ad on the Publishers page.

Same goes with Publishers ad server. Publisher can directly place the 3rd party ad tags (from the advertisers) when they are trafficking Guaranteed ads. Wherein, 3PAS will help the advertiser to traffic their campaign at more granular level by adding audience segments, or feature like creative rotation, geo-targeting, blocking URLs, etc

DMP (data management platform) :

DMPs (like Bluekai, Adobe, Oracle, etc) plays a vital role. We believe in Audience first targeting to target our potential audiences for higher CTRs and Conversion rates. DMPs provide all types of Audience segments, whenever required. DMPs collect data from every other websites, from CRM software, or even from the apps. Now, they help the advertisers (in 3pas server), DSPs and Ad servers to push their audience lists and target the specific list of audiences required for the ad. 

Trading Desk:

In this article, I didn't talk about Trading Desk. Digital ad trading desks are centralized management platforms used by ad agencies that specialize in programmatic media and audience buying from. They are typically layered on top of a DSP or other audience buying technologies; buyers can value each impression like traders value stocks, using first and third party data to decide which impression to buy and how much to pay. Simply, working with a trading desk allows the client to direct where ad spent more closely and examine the results to optimize.

Media Agencies

Media Agencies advise Publishers and Advertisers on how and where to advertise, and on how to present a positive picture of themselves to the public. Starting from creating, develop an interactive ad, trafficking them for Advertisers/ Publishers, troubleshooting the issues, pulling reports for optimization, etc. They might also involve the other entities of DM, like SEO, SMO, SMM, etc for better page rank, which will help the associated creatives to get serve from Adwords with high ranks and relevancy.

PMP (private Market Place)

Ad exchange and DSPs mostly serve impressions for remnant inventories of the Ad servers. There are three relationships, which are mostly taken into consideration for an ad serving from a DSP:

1. RTB : Real time Bidding. Where all DSPs are interconnected with the Exchanges. When an ad calls comes in to exchange, it forwards to all the DSPs and the process goes one. Many : Many relationship
2. Private Auction: A Publisher tied up with a specific set of advertisers, where the ad calls from the exchange will be sent to those advertisers only. One : Many relation
3. Private Deal: A Publisher sends the ad call to a specific Advertiser through the ad exchange to bid with the winning ad from the ad server. One : One relation

For some of the Giant advertising platforms, they also use Programmatic buying and selling for Guaranteed inventories as well. Those can be programmatic or might be an ad tag from the DSP, trafficked in the ad server.

P.S: Please feel free to flag if anything is wrong or seems to be irrelevant, or if any internal procedure has been shared. This is completely my basic understanding of an Ad serving system in Digital marketing. let me know if we can add anything else as well.

To be continued with more granular steps and updates.....