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What is Lead Scoring and How Does it Work? When it comes to acquiring new customers, most businesses focus all their time, money, and effort on one of two processes: acquiring leads or nurturing leads. Tons of resources are poured into lead generation activities (e.g., marketing, advertising, blogging, etc.) or lead nurturing activities (e.g., sales calls, email follow up sequences, etc.). In other words, most businesses either focus on what happens before someone becomes a lead or what happens after they become a lead, but what about the process in the middle? Many marketers and even businesses don’t even know that lead scoring exists, which means that the process of selecting which leads to pursue, and which to ignore, often goes overlooked entirely. For businesses that get very few leads, this is fine. However, businesses getting hundreds or even thousands of leads per day need to have a process in place that allows the sales team to prioritize which leads to pursue. It’s important to realize that not all leads are created equal. Some leads are cold and at the top of the funnel, while other leads are at the bottom of the funnel and are literally ready to buy right when they’re submitted. Still other leads won’t even be in the funnel at all, like those sent in by researchers or bloggers just poking around, and would be a complete waste of time to chase down. This is why it’s so important to have a lead scoring system to handle the sales process. Having a system that assigns numerical values to leads in such a way that will allow a sales representative to go after high-quality leads and disregard low-quality leads will result in better time efficiency and more revenue in the long run. That’s where lead scoring comes in, and that’s what we’ll explain to do in this post. What is Lead Scoring? Lead scoring is the process of assigning values to your leads so that you can label those that are most likely to convert and those that are not. This way, you’re able to prioritize which leads your sales team will contact next. Without a lead scoring system, leads would be chosen one by one which is fundamentally flawed because many of those leads will end up being a dead end and a huge waste of time. Having a lead scoring system is an extremely valuable tool for a business since it helps improve the efficiency of the company’s sales team, generates more revenue, and helps prevent the sales staff from experiencing burnout.   Better time efficiency means no time is wasted on bad leads, and no time wasted on bad leads means higher conversion rates and more revenue for the company. Additionally, since the sales team can see what characteristics and attributes make a high-quality lead, they can relay this information to the marketing team, which should help improve the overall marketing strategy too. With improved marketing, the leads coming into the sales funnel will be even more qualified than they were before, making the marketing and sales process easier, faster and more profitable for the company. How Does Lead Scoring Work? To give a prospect a lead score, you must first come up with a point system with rules. This point system is at the heart of lead scoring and what ultimately allows you to know which prospects are hot and which are cold. The first step in creating a point system is looking at past and present customers. Look for commonalities between customers—the attributes that they all share or the common actions that these customers took just before becoming a customer (e.g., a download, a click, a form submit, etc.).   The next step would be to assign a numeric value to each of the attributes you have chosen to be good indicators of potential customers. There are different ways to assign points to attributes, but to keep it simple, one way would be to add a higher amount of points to crucial attributes that all customers share and fewer points to those attributes that occur less frequently in customers. Three Types of Scoring There are three main ways most systems and organizations score leads. The first one is demographic scoring which is when you score a lead based on the data you have collected on the lead submitter. For example, people who live in a certain location or those that are a certain age would receive a higher score. This way, you can ensure that those who fit your target demographic will get prioritized. The next type is behavioral scoring. With behavioral scoring, you score a lead based off of how they interacted with your website or business. Using behavioral scoring, you might award more points to people who have visited multiple pages of the site, people who have visited the pricing page, people who have downloaded a brochure, etc. Lastly, there’s negative scoring which is where you deduct points based on attributes that would automatically disqualify someone from being a good lead. For example, you might want to deduct points from leads who have visited the employment page, or who did not include either a phone number or email address on the lead form they submit. Having a system that utilizes these 3 different types of scoring will allow you to qualify and rank your leads more accurately.   How to Find the Important Attributes A lead score model needs a set of rules that tell you when to add points to people with certain demographic and behavioral attributes. But how do you know which attributes to award points to? First, try asking your sales team. Since your sales team is constantly in the trenches, actually interacting with your leads before they become customers, they usually have valuable insight as to what type of attributes indicate that someone will become a customer. Next, you could ask your advertising department. It’s no secret that advertisers must deliver the right message to the right people, otherwise, their advertising efforts will have been for nothing. To do this, advertisers have a predetermined set of attributes that they use when they’re configuring their targeting settings just before launching a digital ad campaign. Viewing your advertising department’s targeting settings just might give you the insights you need to discover those important attributes that you can assign points to. You also might be able to find important attributes from your marketing department. Like the advertising department, the marketing department also has a target market—a set of attributes—which they hone in on when they deliver their creatives, content, and collateral. Looking at the marketing department’s targeted demographics can reveal hidden attributes that might not have been obvious at first. Additionally, you could ask the customers themselves since their inner thought processes are something that no marketer could replicate. Although surveying your customers is more time consuming, it might be worth asking them why they think they became customers or when in the sales cycle they knew they would become customers. You could do this by interviewing your customers, sending them a questionnaire, or by sending them a poll. Lastly, you could also check your analytics, which is ripe with valuable insights on your customer’s demographics, interests, and behavior (all three types of lead scoring data!). Running an attribution report can uncover which marketing activities convert leads into customers. You could also check which pages of the site leads have viewed before turning into customers or which pages visitors viewed before turning into leads and use this info to assign a higher score to leads that have viewed those pages. How is it Done? There are a few different ways of lead scoring, however, some methods take longer and are less effective than others. The first way of doing this is manually, although almost no one ever does it this way anymore as it becomes too time-consuming. Another method is using a data mining technique called logistic regression. For this method, you must build a formula (typically in excel) that takes into account all of the customer’s attributes and analyzes how they interact with one another, which in the end, will determine the probability that a lead will convert into a customer.    And finally, there are some automated approaches that do all of the heavy lifting for you. For example, some email autoresponders have a lead scoring system already built into them, with a few examples being Active Campaign, Get Response, and Drip. But even that isn’t as effective as another automated lead scoring method called Predictive Lead Scoring. Predictive Lead Scoring In an ideal world, your lead scoring system wouldn’t be static, but instead should be a living, breathing thing that changes as the market and your customers change. The criteria and attributes that make a good, high-quality lead might not even be the same from month to month—this is especially true for businesses that are heavily influenced by seasonality. This is why it’s recommended that you constantly need to be making tweaks to your scoring system so that it stays as accurate as possible. But this can quickly become too time-consuming, stealing the time you need to dedicate towards other elements of running your business. How can you automate the lead scoring system tweaking process and essentially “set it and forget it”? The answer is predictive lead scoring. Predictive scoring is an AI-based scoring system that uses machine learning to look at thousands of data points to see which attributes indicate hot leads. The scoring algorithm is constantly evolving, automatically making tweaks, updating itself, and sorting your leads to ensure that those most likely to convert remain at the top of your sales funnel. Admittedly, predictive lead scoring isn’t the right tool for every business. Because the sorting algorithm needs a large number of data points for it to work, predictive lead scoring is best suited for Businesses that have thousands of customers. If you’d like to try out predictive lead scoring, some popular lead scoring tools are MadKudu, Infer, Mintigo, and 6Sense. What Should You Do? No matter what lead score software or method you do end up choosing to use, the important thing is that you try something other than treating every single lead as being equal, as that’s an incredibly inefficient way to handle sales. Lead scoring is incredibly powerful and the truth of the matter is that most lead-based businesses could benefit from implementing a lead scoring system of some sort, even if it’s incredibly simplistic and done entirely manually. If you’re looking for ways to increase lead conversion rates, improve sales rep productivity, save time and money, and improve profits, then you need to look into lead scoring! About The Author Darden Faulkner is a freelance writer and product reviewer living and working in Irvine, CA. He enjoys long walks on the beach, learning everything he can about Google products, and has just discovered Twitter!  Follow him over on Twitter  for the latest life updates
Demand Side Platforms Explained DSP stands for Demand Side Platform, but what does it actually mean? Lots of terms and concepts in the programmatic advertising ecosystem can be hard to understand and even more difficult to explain. In this article, we’ll walk you through all there is to know about DSPs, how they work, and the role they play in Programmatic Advertising . How an Ad gets to you The world of online advertising functions much like traditional advertising: at its core, advertising of any form is all about getting you, the consumer, to view an ad, sign up for some list, become aware of a product or service, or purchase something.   Even in the online ecosystem, advertisers and their agencies still need send orders in to publishers for ad space in a variety of formats, which means that traditional media orders and buysheets aren’t totally dead. However, programmatic advertising allows advertisers to automate away a lot of the manual work – meaning that insertion orders and complicated media buying worksheets are on their way out. Ad agencies work with advertisers to come up with a variety of marketing materials – from simple text ads all the way to fully interactive expandable ads and entire websites. They load the digital versions of these marketing materials into an ad server, and the DSP allows them to place bids for showing these materials on available online ad space. This can happen directly, or via a DSP ad network. The publisher’s Supply Side Platform (SSP) accepts these bids from the DSP, and routes the winning ad to their ad server, where it’s made available to the user. DSP advertising attempts to make the complex system of finding and placing ads simpler, faster, and more affordable, with much of the underpinnings hidden away from the businesses using them. The system itself is also virtually invisible to end users just browsing the web, so it doesn’t interfere with the user experience at all either. What is a DSP, exactly? DSP advertising companies create complex and intelligent software to enable the online trading of ad space. But how does this actually work? At their core, DSPs are extremely complex, web-connected databases. They use human interactions and machine learning to optimize and track available ad space and the users those spaces refer to. This all happens on the backend via DSP ad networks – the “brokers” of this system. These networks are what actually “announce” the available ad space to the DSP system itself. Through machine learning processes, DSPs attempt to find the best possible traffic (usually the highest chance for conversion or click through) at the lowest possible price, allowing the advertiser to place ads more efficiently, and get more value out of their ad spends. You may have heard people talking about “DSP SSP” systems – these are closely related, but not the same thing. SSP software is what publishers use to make ad space available. Using similar machine learning processes, it attempts to earn as much money as it can for the publisher. We’ll go over the differences of SSP vs DSP a bit later in this post. Comparing the best DSP platforms As with any other business, there’s a lot of competition in the DSP space. New vendors open and old vendors close down regularly, so the options are constantly changing. Few DSP systems have stood the test of time – but those are the ones we’ll review in detail here. The Trade Desk This is the big daddy of DSPs. One of the first and one of the best DSPs available, The Trade Desk DSP offers a large feature set and some of the most flexible bidding terms available. This doesn’t come free, however, as use of the platform requires significant monthly minimums which may be too high for an individual advertiser. Because of cost considerations, this software platform is mostly used by agencies. The Trade Desk Pros & Cons Pros: Intelligent bidding – ability to modify bids on the fly based on any number of factors Integrated DMP Private video marketplace – exclusive to Trade Desk users Programmatic Connected TV options available Detailed reporting makes it easy to slice data Unique custom-built AI platform Cons: Expensive, high minimums required each month to maintain access Access to ad inventory is uneven – extensive in some areas, limited in others Doesn’t always play nice with other DSP software for reporting purposes Adobe Experience Cloud Adobe’s software is focused on connection and bringing data together to make better decisions. What it lacks in reach, it makes up for in reporting, analysis, and targeting tools. Adobe Experience Cloud Pros & Cons Pros: Best reporting and targeting system available Can handle multiple ad formats like search, TV, social, and video Cross-screen planning so you can run one campaign across media types Premium inventory manager brings campaigns that would normally run separately into the platform directly Multiple-device targeting instead of cookie targeting Cons: AI is offered as a paid upgrade Some complaints that the interface can be clunky Limited reach Despite all the backend benefits, if your ad can’t reach people it can be hard to justify selecting this software Taboola This is a unique DSP, focused more on video and content discovery than direct advertising. It has been criticized for having a spammy end-user experience, and it doesn’t always generate the best CTRs, but it’s typically much more affordable than the larger, more sophisticated platforms. Taboola Pros & Cons Pros: Unique content-focused DSP Wide reach, with placements on sites like Bloomberg, MSN, and NBC News Brand safety tools Offers different options for each level of the marketing funnel Cons: Tracking and reporting is not the best Comes across as spam on many sites Private marketplace only , limiting options for ad placement Amazon DSP This is the exclusive way to access Amazon’s network of ad space. This includes Amazon, of course, but also other sites they own such as IMDb and Zappos. Amazon DSP Pros & Cons Pros: The only DSP with direct access to Amazon’s ad inventory Unique reporting options available for Amazon-based inventory Integrates with other Amazon services, like Transparency and Brand Registry Kindle advertising available Cons: Only supports display and video ads Limited reach outside Amazon’s network of sites Access requires minimum monthly spend Few agencies are operating in the Amazon ad space Limited reporting for third-party ad networks Is a DSP also a DMP? This is a bit of a complex question, because a DSP can incorporate a DMP, but it doesn’t always. These two separate pieces of software work well together though, so there’s a good reason to choose a DSP that also has a DMP, or which is at least capable of interfacing with one. DMPs are Data Management Platforms. These systems bring together data from different sources and use it to define target markets and target individuals across devices with high precision. 1st party data - Data you already own, like subscriptions, demographic info, contact info, behaviors, purchase history from your website, cookies, social media, apps, etc. 3rd party data - Data that is purchased from companies that have purchased 1st party data from publishers Data Management Platforms are an important piece of the programmatic puzzle, and programmatic teams should consider how well a potential DMP interfaces with their chosen DSP when making the decision on which one to utilize. Other elements of the Programmatic Ecosystem There are quite a few other elements that DSPs connect to and work with. We’ve got a complete guide to the programmatic world available as well, but here’s a quick overview of what each piece does: Ad Server – Hosts all the data and media filed for each advertisement. These are normally connected to the DSP, but a publisher may also have one on their end Ad Network – Ad Servers and DSPs connect to these to find and traffic ad opportunities across the internet Ad Exchange – These are larger networks, usually made up of multiple ad networks. They have a lot of key differences, so we recommend viewing our full post on the subject Data Management Platform – These connect with DSPs to act as an assistant. Advertisers can use this to more effectively target and segment users. Publishers can use it to optimize their available ad space and more effectively price their ads Line Items – These are what advertisers enter in DSP software systems to instruct the system what sort of user to target. Similarly, advertisers use this to communicate what sort of space is available. Why are there 2 platforms? DSP vs SSP One of the most complex parts of programmatic marketing is understanding how everything works, because of how complex the system has grown to become. DSPs and SSPs are essentially the same software, doing many of the same processes – just in opposite directions. The reason these two systems each exist, and operate individually, is to accommodate the different goals inherent in each side of the programmatic equation. Publishers want to make the most money possible, and advertisers want to pay the least amount of money possible. If campaigns were managed by a single system handling both tasks, it could unfairly benefit a particular side – by forcing two systems to work against each other, this helps ensure the marketplace stays fair and balanced. Your Next Steps Where do you go from here? Now that you’ve learned more about how programmatic advertising works, why not look into getting started with a programmatic career of your own? You can find available Programmatic Marketing Jobs, and other jobs in digital advertising, by visiting our Jobs page !
Programmatic Advertising Explained Programmatic Overview It’s not unfair to say that programmatic advertising is a revolution in the world of marketing. No longer do we live in the Mad Men world of mass campaigns flung wildly around a market—nowadays, marketers buy audiences and access to individuals, not ad spaces, and the question has moved from “what do we advertise?” to “how do we deliver the right message, in the right context, at the right moment?" Unfortunately, confusion is as much a feature as it is a bug of ad tech. To help, Digital Media Jobs is here to explain. Let’s take a deep dive into the programmatic world with Programmatic Advertising Explained In Plain English. What is Programmatic Advertising? Programmatic means Automation: Programmatic advertising has eliminated the manual process of connecting inventory suppliers, data providers and media buyers to streamline the media buying process through automation. While humans are still involved, gone are the days of insertion orders, faxes, spec sheets, and all manner of other bureaucracy. Programmatic simplifies the relationship between advertisers and publishers and makes it easier to get ads in front of the people most suited for them. One of the main benefits of programmatic advertising is just how targeted advertisements can get with machine learning. By tracking past results faster than any human can, machine learning can redistribute ad budget in real time and calculate the best bids. This helps increase the chance that an ad backed by machine learning will win the auction and be shown to a user. A particular ad for pizza could be served only on sunny days to users in offices within a 5-minute drive of a Papa Pizza’s restaurant. Did they miss the advertisement on their work computer? Machine learning can identify their phone and serve a follow-up ad as they head out to pick up lunch. Programmatic Advertising Definitions Let’s start with a few basic explanations! What is a publisher? – Anyone who produces content that’s posted online and eligible to run ads. For example, The New York Times is a publisher. NPR is a publisher. This very site is a publisher. What is an advertiser? – Anyone who displays ads on the Internet (or off it!) is an advertiser. For example, Coca-Cola, Disneyland, The Cheesecake Factory, and Mazda are all examples of advertisers. This can happen directly within a company or through an ad or media agency. What is a marketer? – Marketers are the people behind the brands. They work with a variety of partners to get ads created, placed online, and out to the world. While there are distinctions between the marketing and advertising worlds, these terms are often used interchangeably and the line between them is increasingly blurred. What is a Lumascape? – Luma Partners created charts organizing the programmatic world of companies. The Lumascape charts are complex and there’s a whole pile of them. They can be confusing to read through, but they give a very good outlook into how data and information flow through the assorted programmatic data systems to reach a consumer. You can find them here . Ad Server The Ad Server is where all the images, videos, files, and pop-ups live. So, when a website needs to populate an ad space, it connects to the ad server and retrieves the appropriate content. Ad servers also do the legwork of tracking impressions, monitoring performance, and integrating with brand safety or fraud detection software. Ad servers work cross-platform, delivering ads to desktops, tablets, smartphones, billboards, and televisions. They can be remote (hosted by a third party as a service) or local. Ad servers also indicate the actual targeting for a particular ad. When an ad request comes in from the marketplace, the ad server matches the request to the associated ad. It’s extremely important to make sure this software is set up correctly, or the rest of your work as an advertiser will be wasted. Publishers and advertisers frequently have an ad server on each side of the equation. This has a number of benefits for tracking and keeping ad information updated, but can also present billing challenges. For example, Papa Pizza wants to ensure that all the publishers they advertise with have the newest set of ads. Without an ad server, they’d need to go out and update each publisher manually. With a server, they change it once and the ad updates automatically. The billing challenge occurs when the delays inherent to the Internet appear. Two ad servers mean two systems tracking impressions. If there’s any difference in the clicks tracked between the separate systems, the publisher and advertiser may have different numbers to base their billing on, causing an ad-serving discrepancy. There are many reasons this can occur (different ways of tracking, different platforms using separate analytics software, even geographic differences) but it’s important to maintain contact with the publishers you advertise with to help manage these discrepancies – this is where the old fashioned “pick up the phone and call” very much comes into play. Ad Network Ad Networks are the companies that buy ad impressions and sell them to advertisers. They act as the wholesale broker of the programmatic world. Advertisers don’t have time to look through every single online ad space – ad networks do this work for them. Most networks focus on segmentation by traditional demographics (age, gender, marital status, location, online habits) and current device. Others focus on price or content type (for example, some agencies may specialize in mobile, while others may choose to provide an adult-oriented service) – every network is different. After repackaging the variety of impressions they’ve purchased from multiple sites, ad networks sell impressions to advertisers for a profit. Ad Exchange Confusingly, ad networks perform much of the same functions as ad exchanges. There are a few important differences. Ad Networks vs Ad Exchanges Ad networks are single companies buying and selling bulk packages of ad impressions. Ad exchanges sell impressions one at a time. Ad networks specialize in whatever niche they decide to serve. Ad exchanges offer lots of options. Ad networks require some planning since impressions are purchased in bulk. Ad exchanges allow for optimizations at almost any time. Ad networks can be part of an ad exchange – sometimes they will sell space on an exchange, and sometimes they’ll buy space from one. Ad networks come with incomplete transparency. Advertisers don’t fully know what site their ads will show on, and publishers don’t know who is buying their ads. Ad exchanges usually provide click-by-click tracking, and sometimes allow advertisers to view competitive bids. However, publishers can decide what information to show on an advertiser-by-advertiser basis. There are different levels of transparency, from lowest to highest: Blind – The DSP receives no info at all. Masked URL – Programmatic method usually used in fraud cases, where a low-quality or unsavory site masks itself as a high-quality site (think a porn site pretending to be YouTube or Blogger) Top Level Domain/TLD – The advertiser knows the ad will be on Berry Vine’s website, but not which page in particular Section Targeting – The advertiser knows the ad will be in the Berry Vine’s Business section, but not which page in particular within that section Full URL – The advertiser knows exactly which page on the website the ad will appear on. Ad networks generally provide “premium” inventory (high visibility and high likelihood of being clicked on). Ad exchanges offer access to all inventory in the exchange. Both ad networks and ad exchanges can integrate with DSP and SSP software. Pricing at a particular ad network generally stays the same. Ad exchange pricing varies. However, ad network pricing tends to be higher than an ad exchange. Examples of Ad Networks: Google AdWords, Criteo Examples of Ad Exchanges: OpenX, Rubicon Project, Google DoubleClick / Google Ads Manager Agency Trading Desk / Programmatic Trader These are the wranglers putting in ad orders and tracking that the ads are filled and go out properly. They are often part of an online advertising agency, but they may also work in-house at a larger brand. They do everything: checking campaign performance, enacting optimizations, analyzing data and results, and even working with clients in some cases. They usually work across a variety of networks, exchanges, and other online ad providers. Their job roles can vary significantly based on experience and agency – to learn more, we’ve written a full report here. Data Management Platform / DMP Data Management Platforms sound scary, but at their core, they’re essentially a massive database. They store all kinds of data, from tracking and audience information to results and reports. DMPs are helpful in pulling out audience segments and more effectively advertising to those segments. Some platforms help marketers tie together the data from multiple platforms – normally an annoyingly complex task. Many DMPs also integrate with Demand-Side Platforms (explained below!), automating some of the ad optimization processes. Companies of all sizes can use DMP software to improve their advertising results. Many DMPs are charged on a per-second or per-data-processed basis, so it’s important to consider the pricing method that best fits your business. For more information, take a look at Google’s Cloud Pricing Calculator . Publishers use DMPs for optimization. For example, if the New York Times knows what sort of readership is most likely to read a certain article, they can charge more for ads when those particular people visit the article. DMPs help them identify those customers. It’s important to note that DMPs only work well when the data they store is complete. Be strategic about the data you collect and input into a DMP. Focus on data you and your direct partners have collected, as it tends to be the most useful. Third-party data should fill in the final gaps in your understanding of your customers, not as a strategy in itself. Demand-side Platform / DSP With the data from a DMP, the Demand-Side Platform gets to work. This is what drives the actual buying of the online ad marketplace. These platforms automate the ad buying process. Advertisers no longer need to fax orders and negotiate with salespeople – it all happens in milliseconds, millions of times a day. DSPs make it easy to track and manage online ad purchases. These platforms generally sell ads through a process known as Real Time Bidding. When a user arrives at a webpage connected to the programmatic world, an instant auction takes place. The DSP acts as one of the auction bidders – deciding whether to place a bid, and if so, how much of a bid to place. The goal is to get the best audience possible for the lowest price. Interestingly, DSPs have also affected the traditional ad agency model. DSPs are designed to be used directly by advertisers. Agencies provide guidance and strategic support to operate in more of a consultancy role. Supply-side Platform / SSP Supply-side platforms are essentially the inverse of demand-side platforms. Using similar technology, SSPs find the highest price for a potential ad space. By opening their space to far more advertisers than usual, a wider range of bids is considered and publishers can maximize their online ad revenue. Publishers can set many automated rules to help. They can introduce pricing promotions, set price floors to ensure they don’t sell spaces for too low of a price, automate service for ads sold by their human sales team, and much more. SSPs can also act as a bouncer, only allowing in bids from advertisers the publication has chosen to accept. Line Items & Bid Factors Line Items are how DSP and SSP software match their ads. When a user visits a page, the publisher’s ad server sends a request to their SSP. It matches the data the ad server collected about the page visitor to see if any line items in its’ inventory match. DSPs bid on these individual line items. Some software requires each variable to come in as a separate line item, which can quickly result in complex tables and thousands of potential items. This can cause traders to spend more time moving budgets and changing maximum bids, rather than optimizing them. A recent solution to this problem comes in the form of programmatic bid factors. Bid Factors automatically adjust the bid the DSP is authorized to make based on how important an individual characteristic is to an advertiser. For example, an advertiser could decide to increase the bid for Women 18-34, but not for men. In the same bid, they can also increase or decrease the amount they’re willing to pay by time of day, device type, or any of hundreds of other factors. Different Types of Programmatic Ad Buys Real-time Bidding / RTB on the open marketplace Here’s where digital marketing and the traditional sales process collide. RTB comes into play (usually) at the moment someone gets to a webpage where programmatic ad space lives. In the milliseconds between clicking the link to the page and the page itself actually loading, DSPs and SSPs navigate through an ad exchange and compare bids. The open marketplace accepts bids from everyone, and as long as the price floor is met, the highest bid wins. Many bids occur in what’s called a “second-price” auction. This process helps the winning advertiser save some money by only paying 1 cent over the next highest bid. Publishers stand to lose here, and some are reluctant to accept this. A new feature where the price floats to a point between the two bids is growing in popularity on the publisher side. This could be an interesting tug-of-war as the programmatic world continues to grow. Waterfall vs Header Bidding As many of us know, computers are fast but there is a limit. Users will navigate away from a page if it takes too long to load. Waterfall bidding prioritizes a publisher’s preferred ad networks and exchanges to ensure bids from that network are considered first. If no ads match the publisher’s criteria, or no DSPs send in a bid, the system continues to the next preferred network. This helps reduce the strain of having to process every single possible bid before loading the page, but could result in lost revenue. Here’s a quick example: The Berry Vine newspaper’s website has some ad space to sell. They’ve set their price floor at $3, so no bids under that price will even be considered. A user navigates to the page, and these bids come in on their preferred network: $1 $2 $3 $4 The SSP software selects the $4 bid and displays the ad from that advertiser. No other networks are considered since the first one met the criteria set by the SSP. However, there could have been a bid higher than $4 on the next network . Waterfall bidding means the publisher misses out on that opportunity. Header bidding solves this problem by conducting a more unified auction. It allows publishers to receive bids from multiple ad exchanges at once. It’s a tradeoff that opens more revenue potential for the publisher, but processing all those bids in the time it takes a page to load can cause longer page load times. This type of bidding is also difficult to implement and can be expensive to roll out. It’s not ideal, but companies need to make a strategic business decision regarding which of these two processes is more important to them. Google has recently attempted to solve this problem with Exchange Bidding. This process works similarly to header bidding but happens on Google’s servers instead of via a browser request. This solves the delays inherent in header bidding but results in other drawbacks, such as being unable to match an ad to a user (known as match rate). PMP / Private Marketplace Programmatic PMPs (private marketplaces) are invite-only. Publishers with a premium reputation sell their ads only to approved advertisers. Ads are still served programmatically, but in this case, the buyer knows exactly what website their ads will appear on. Ad exchanges are not involved, and the DSP connects directly to the publisher. Another version of this is the closed auction. Real-time bids still come in, but only from a list of approved advertisers. TL;DR: Private club. Tip the bouncer. Programmatic Direct / Guaranteed / Reserved / Premium / Preferred All these names basically mean the same thing – direct purchase of ad space outside of the bidding system, but still served programmatically. Guaranteed/direct sale ads can be sold in the traditional offline method, through ad exchanges, all kinds of different ways. It combines the guaranteed locked-in clicks of the “old methods” with the hyper-targeted precision of modern online advertising. For extra confusion, preferred deals exist. In this case, a publisher locks in a price with an advertiser. They get offered ad space first but are not required to buy the spot. If they decline, the space then enters the RTB system. For even more confusion, the Interactive Advertising Bureau calls this “automated guaranteed”. TL;DR: Deal happens outside of RTB but they’re still served programmatically. Deal ID Deal ID is one of the most important terms in the programmatic world. Deal ID is a unique string of characters that serves as an identifier and is submitted along with a bid. Anything can be tied to it: custom data, level of transparency, priority, minimum pricing, access to ad units, and access to specific sections of the site; even specific agency and client approval that would normally be unavailable can be tied to Deal ID. Some have called deal ID the “programmatic IO” or “modern insertion order”, and it remains an interesting quirk of the programmatic process. Deal ID combines the best of traditional advertising with the flexibility of programmatic advertising. This process gives power to publishers, but also a bit more risk – since they’re tying in more tightly with an advertiser, it’s possible their trust may be abused and their terms may not be fully respected. Who are some of the main players? It’s definitely important to know who you’re working with in the programmatic world. Some providers specialize in just one segment, while others provide a full range of programmatic services. Google – As with many other things, Google is king of the programmatic ecosystem. Through their DoubleClick brand (now known as Google Marketing Platform and Google Ad Manager), they offer DSPs, SSPs, ad servers, data management platforms, data processing solutions, an ad network, and an ad exchange. Amazon – Amazon also offers a wide variety of programmatic software, focused on display and video advertising. They offer a DSP, a SSP they call Amazon Publisher Services, and Amazon Web Services (AWS) powers much of the modern Internet. Amazon represents a unique opportunity since their ad software can fully integrate with the Amazon store – where users are very likely looking to buy something. Adobe – A recent entrant into the programmatic space, Adobe offers a comprehensive DSP, TV and search platform along with a powerful ad customization tool. Freewheel – Developed by Comcast, Freewheel is one of the main players in the video and programmatic TV ad space. They specialize in video and lead the pack as a result. The Trade Desk – Trade Desk is one of the largest DSP software providers. They’ve recently launched an integrated DMP and a new omnichannel feature that proves to be very interesting. Omnichannel ads run across multiple devices for the same person. They’re the reason that coat you looked at on your laptop is showing up on your tablet, smartphone, and soon, your TV.   Programmatic Crystal Ball Programmatic TV Programmatic TV isn’t all there yet, but it’s coming. The technology hasn’t been fully embraced, and some TV networks are likely to resist it – when you’ve got something that works, why change? However, the little networks with ad space to spare definitely have reason to take a look at this technology. You may have experienced programmatic TV advertising at home – Hulu uses programmatic technology to fill ad space, and it’s likely even more digital TV and connected TV networks will make the switch. You’ll also hear a similar term called addressable TV advertising – this just means targeted TV advertising within the same program (So if you’re watching the X Games, you may not see the same advertisements as your neighbor). Learn more here ! Ad viewability will be a central concern here – advertisers will want to measure how many people can both see and hear their ads. Programmatic DOOH You’ll see this referenced in a variety of ways: Digital OOH, Digital Out of Home, DOOH. They all mean the same thing: Internet-connected video billboards. This is already starting to become a reality. Digital Out of Home ads can already be served programmatically and update to take advantage of the latest geo-targeted ad data. In this case, advertisers are currently buying “expected audiences” rather than individuals. For example, they can buy ads based on who drives on a particular part of the 405 freeway at certain times of the day. Not many players have quite yet entered this space since most billboards are owned by a handful of companies. Your Next Steps Now that you’ve learned more about the programmatic ad process, why not look into programmatic careers? You can find these kinds of jobs and more on our Jobs page!
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