There are four main programmatic buying methods, namely;
- Real-Time Bidding
- Header Bidding
- Private Marketplace
- Programmatic guaranteed
- Preferred Deals
Let us briefly look at each of these options.
Real-time bidding (RTB) is a programmatic advertising model that allows buyers to purchase ad spaces through an auction. The spaces are presented in the form of individual impressions, and the buying and selling process is done through a dedicated ad exchange.
The ad exchange is connected to the publishers in the various niches through SSP. Advertisers are connected to the ad exchange through DSP. In a nutshell;
- The publishers provide the impressions through the SSP.
- The ad exchange platform places bid requests for the impressions on the DSP.
- Once the advertiser sees the available ad inventory, they send a bid request to the ad exchange.
- SSP compares all the bids submitted and sells the impression/ad space to the highest bidder. A DMP facilitates the whole process through cookie matching and the exchange of relevant data between the supply and demand platforms.
- Once the transaction is finalised, the ad servers automatically place the creative ad provided by the advertiser to the ad spot on the publisher’s website.
Unlike other digital marketing strategies that take hours, the whole process of finalising the deal and placing the ad on the purchased ad space is completed in milliseconds and as the website page is loading.
Since the whole bidding process is real-time and in an open market, there are no restrictions, and anyone can participate.
Header bidding is quickly gaining prominence in the industry thanks to its success so far. The main highlight is that instead of every ad exchange platform having a separate auction, all the ad exchange platforms bid for impressions simultaneously.
Private Marketplace (PMP)
As the name suggests, a private marketplace is an exclusive trading platform made available to invited advertisers. Due to the closed advertising ecosystem, premium publishers provide ad space or impressions to a handful of big advertisers at premium rates.
In a PMP, the advertiser’s DSP is connected directly to the publisher’s inventory, eliminating the need to have an ad exchange platform. Buying and selling of ad space are done via a real-time auction.
Programmatic Guaranteed is a way of buying ad spots directly from the publisher. Instead of taking part in an auction, the advertisers and publishers agree on a specific price for ad placement and the number of impressions beforehand.
Even though it does not involve any bidding, the negotiations are conducted automatically through a dedicated API.
Preferred deal is the process of providing ad inventory to a select group of advertising partners at a fixed rate. If an advertiser opts not to purchase the ad space, it is available to the RTB or the private marketplace.
This form of programmatic advertising media buying is efficient as it allows publishers to sell their ad inventory to exclusive advertisers. There is also an additional chance to sell via an auction if the advertisers fail to purchase them.