Editor’s note: This is the second installment in our programmatic buying blog series. Each blog takes a look at different aspects of programmatic buying and how it can be used.
Programmatic media buying has been a hot button topic in the news as of late, even on our blog. With the rise of the first full-fledged programmatic television buying platform, education will be necessary to stay ahead of the game. But let’s be honest, not everyone has time for a formal “education” on the subject, so here are six must-know acronyms to navigate the programmatic space.
DSP – A DSP, or demand side platform, is the buyer’s half of the programmatic marketplace where media buyers and advertisers go to buy impressions from a wide variety of sources. The programmatic marketplace works something like a stock exchange. There are buyers and sellers of impressions. Sellers set an opening price (floor cost) for an impression and buyers bid to buy the impression. Like any auction, the highest bidder wins. This type of environment allows buyers to use maximum bids (advertiser ceilings) to signal how important a particular impression is to them. These bids can be affected by a myriad of factors that may raise or lower the bid, but this type of buying still affords major discounts and efficiencies as compared to traditional banner or video buying methods. Other uses of DSP include accessing inventory through direct connections with publishers, accessing campaign targeting data, for use as a bid management tool, and accessing advanced optimization algorithms.
SSP – A SSP, or supply side platform, is the seller’s half of the programmatic marketplace where publishers and other inventory sources can go to “supply” their inventory on a programmatic exchange. Publishers of content like The Wall Street Journal, USA Today, and Condé Nast go to supply all or some of their inventory. This benefits to both sides of the transaction. Media buyers receive pricing efficiencies by buying inventory through a DSP and the publishers can sell all of their remaining inventory not sold through traditional methods. Even though the publishers are not getting top dollar for the inventory, the volume of sales will usually make up for the price gap.
DMP – A DMP, or data management platform, is a depository of data collected through various methods that allow advertisers to create targeting segments for their campaigns. This technology can allow brands to sift through billions of data points to define a target that is likely to buy their products. These platforms are becoming very crucial for brands that are moving more of their media budgets towards programmatic buying. Buying decisions are made in milliseconds on DSPs and the only way to accurately target users is through advanced data modeling, which takes place on data management platforms.
Big Data – Big Data is not an acronym, but it’s a very important concept in programmatic buying and the digital landscape as a whole. This concept is closely aligned with DMPs. In the connected world we live, people are generating massive amounts of data just by going about their daily lives. Big data goes beyond web surfing and site behavior. Whether it is fueling up a car at a gas station or getting blood pressure taken at the doctor’s office, we are creating data points that can be used to develop efficiencies and predict future behavior. The more data points that are collected, the more ways advertisers can target potential consumers, even down to a 1:1 level.
RTB – RTB, or real time bidding, is the auction-style method in which programmatic is bought. This concept has been around for quite some time and is synonymous with programmatic buying.
ATD – An ATD, or agency trading desk, is the integration of either a DSP, SSP, or a combination of both directly into a platform for use by a specific advertising agency. Many inventory sources and platforms to manage bids are available to media buyers. Developing an agency trading desk allows an agency to winnow down the choices, but also to have a central location to integrate several inventory sources and to bid across them simultaneously.
As more advanced technologies, concepts, and buying methods emerge, advertisers will find themselves in the thick of programmatic buying. An eMarketer report in October of this year reported that $10 billion had been spent within the programmatic space, and that total would double in just two years. To put that into perspective, programmatic was 21% of the overall digital media spend in 2014 and is projected to be 36% of the overall digital media spend by 2016. Advertisers are not shying away from this buying method and will continue to adopt it as more publisher inventory becomes available through these channels. Knowledge is power, so learn while you can.