The traditional model of buying media on line is evolving. New terms are appearing which we try to organize and understand, but it’s not easy when within the same phrase we find acronyms such as RTB, DSP, SSP and Adexchange. They are all part of the so-called programmatic buying ecosystem. Last year it represented 16% of the advertising investment on display and it is estimated to grow more than 20% this year.
What is programmatic buying?
IAB defines it as “the making of a purchase of on-line media through bids or stable offers through technologies based on some algorithm that defines the terms of the demand and are capable of executing the purchase which best fits the objectives of the campaign, defined in terms of profiles, price, value or any other parameter established and identified for the buyer and whose execution is done in real time". In other words, it consists of buying advertising prints through a “self-service” platform in which the advertiser can define all of the parameters of his campaign in a very simple and intuitive manner. The price of the print is determined by a Real Time Bidding (RTB) auction.
What is RTB?
It is the protocol for purchasing advertising which enables the acquisition of prints individually thanks to real time bids. In order for the interchange to occur there has to be an offer of prints, a demand, and a place where the transaction takes place.
The offer (SSP)
Supply Side Platform. Agglutinate the inventory from publishers (web pages, mobile webs and applications) and adnetworks. This inventory is offered to the demand (DSP) through direct integration or through Ad Exchanges.
The demand (DSP)
Demand Side Platform. These are the platforms which demand advertising inventory and whose purpose is to determine in real time what the price of a print is. They therefore work on the side of the advertiser. The time that the DSP takes to find the most adequate price for a print is important and the quicker the better. We’re talking about milliseconds by the way.
Ad Exchange (the meeting point)
It provides the technology necessary for the SSPs and the DSPs can match up and for the transactions to occur in real time. It is similar to the stock Exchange or an Auction house. Currently, there are some SSPs which serve the function of Ad Exchanges and vice-versa.
