When a relative asks you over the dinner table; “so what are you doing right now at work”, it’s a usually a good time to talk about the weather, especially when programmatic sounds like a word you just made up (also its not even made its way into the Oxford English dictionary yet!) But never one to shy away from a challenge, I gave it a shot.
Of course to avoid utter confusion, I spared them endless acronyms (which I've added below) and to avoid subjecting the reader to more copy than I already have, there are some areas where some serious generalisations are going on, so be gentle!
A Basic Definition
What is programmatic? From a consumer perspective, its the geeky stuff that goes on in the background that results in you seeing an ad online for rooms in Paris from booking.com shortly after you just happened to be scouring the web for holidays in France.
As a media bod, we should know it simply as automation (or automated trading). Its the use of computers and software to speed up a set of manual processes that deliver an ad in front of a viewer that once took a lot longer. So, just think about programmatic in terms of what sat- navs did for car travel and marriages all over the world.
Our Lead Characters
Rather like any good love story – programmatic is simply a collection 'things that happen' which ultimately lead to the meeting of two people. In this instance, our two ‘lovers destined to meet' are the consumer, and for the sake of my Bieber loving niece, we called him Justin. And to keep my Dad's attention, we'd call the brand a Ford Capri.
Everyone understands the roles of the consumer (buyer) and the brands (seller) but it’s the supporting acts likes SSP’s and ad servers where it starts to get confusing. Although, without these supporting acts in our story, the two lead charters might not have met quite as quickly, or even at all (more of them later). Just like finding your perfect partner on Tinder vs. the old school method of an end of the night chat-up, Tinder is the programmatic conduit that ‘automated’ a few processes like…leaving your living room, getting dressed, talking, turning your head etc etc. Tinder has made it quicker and possibly cheaper to end up with ‘a happy ending’ just like programmatic trading.
So, as we mentioned, in this story, our two key heroines are played by Justin ‘the consumer’ and Ford ‘the brand’
The Back Story: The facts we need to know
What we know about Justin:
WE KNOW: There are people like Justin surfing the web all the time
WE KNOW: Justin likes cars. How? Well, the endless car videos, key words in emails and general browsing has left his personal, trackable tyre marks across the web. We also know he's around 18-24 and lives in California
What we know about Ford:
WE KNOW: Ford want to sell cars
WE KNOW: Ford want to show their advertising to people like Justin
WE KNOW: Ford want to put an ad in front of people like Justin because he has proven that he is interested in cars (because of his browsing)
WE KNOW: Ford are willing to ‘buy Justin's eye balls’ (attention) for the right price by paying a website to allow them to place their chosen ad in front of him
What we know about websites:
WE KNOW: Website owners (publishers) make money by selling Justin's valued attention
WE KNOW: 10 years ago, websites would sell these eye balls to advertisers directly. However, nowadays, they use 'middle men' to help offer these eyeballs to people who want to buy them, like Ford.
WE KNOW: These middle men add value to this process by offering more insight into who the audience is/where they have been etc and they can do all this at scale, quickly. Basically, the more facts they can offer on Justin, the higher the price they can charge.
WE KNOW: Websites have a piece of their page set aside to let ‘brands drop an ad in’ when Justin (or anyone else with their own specific interests) happens to visit.
The Programmatic Journey
Just before we get into the story, for ease, I have skipped over the role of the media agency and trading desk. However, without these guys, this process could not happen. In summary, they are inputting a brief (or set of audience / location criteria) that allows the systems to carry out all the calculations to deliver the right audience at the right price
So, the bullets above have set the scene...
The bullets below describe the processes that make up programmatic or automated trading that result in that Ford ad in front of Justin. All these points happen in a tenth of a second and are conducted by systems and software.
For a terminology overview, jump to the bottom of the blog.
We will come back to Justin but let’s skip to the demand side, in this case Ford.
So lets recap, we now have two primed groups – a seller (MSN.com) who knows what they have to sell and what he's worth, and a buyer (Ford) who knows what they want to buy (people like Justin) but don't yet know where to find them. These two sides of the fence are on the starting line ready to get down to business and so we’ll pick up where we left off with Justin.
If you got his far, well done. As you can see, what takes less than a tenth of a second takes a lot longer to break down. The above process is a summary, in reality, there is merging of those roles and responsibilities and the lines between DSP and SSP and DMPs are no longer as clear as I suggest above. This space continues to evolve at a rapid rate and undoubtedly this landscape will look very different in 12 months.
Feel free to drop me a line if you feel I can better articulate any of these processes.
Thanks for reading!
Just like any demand and supply system, something is being traded (eye balls / attention). So we have a buyer, a seller and others groups helping to value and facilitate the deal.
SSP: (Supply Side Platform): Businesses who have created platforms that enable the seller to more efficiently sell 'eye balls'. They are 'on the side' of the supplier so aim to get the best price for their publisher / website brand.
DSP: (Demand Side Platform): They are 'on the side' of and work for the 'demander' of the eye balls e.g Ford. Their job is to get the lowest price for the most valuable eye balls.
DMP: (Data Management Platforms): These businesses own data and aggregate it to build better pictures that help value the eye balls so SSPs can charge more and DSPs can value the eyeballs appropriately.
Ad Exchange: This is the digital market place where a lot of these trades occur
Ad Servers: These help deliver the right ad to the right location for the winning bidder