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Understanding Programmatic Advertising Supply Chain

Updated: Jun 29, 2022

So, you have just started a business and want to expand it. How do you do it? Well, obviously by advertising. But where do you advertise? The newspaper? The magazine? These options are isolated and most definitely don’t reach enough people. The main reason would be digitisation. So posters, newspapers, and tabloid magazines are just not enough anymore. This is where digital marketing comes in. Digital marketing needs understanding to make an online business campaign successful.

What is programmatic advertising?

Programmatic advertising is the technology the enables you to place ads in ad spaces of publishers. Now there is a process to how this works. First, let us understand the different components of programmatic advertising.

SSP – stands for the supply-side platform. It is a kind of software that looks after the supply side of the publisher side. This software takes information from the publisher, such as – the minimum range for which a publisher offers their ad space, the content, and general information about the publisher. SSP mainly finds advertisements suitable for the publishers’ content and uses the ad space effectively.

DSP – stands for the demand-side platform. This software takes promoters information – the maximum bidding price, the target audience, and the advertisement content. DSP mainly finds ad spaces based on user interest and shows those ads to the consumers. This enables targeting a specific audience and also ensures the ad gets good impressions.

Ad space/ Inventory space– Ad space or Inventory space is any space you see in a website or platform where an advert is displayed. These ads are generally a result of programmatic advertising.

Ad exchange – Ad exchange is a technology that acts as a mediator for SSP and DSP. Since it is technology, there is complete transparency for the advertiser as they can directly buy inventory space from suppliers. However, they are slightly complicated and may be best used by veteran businesses with a lot to invest in.

Ad network – Ad network also is a mediator connecting SSP and DSP. However, an Ad network is a company. These Ad networks buy inventory space from publishers in bulk and sell to the advertisers. This means that there is a lack of transparency. The supplier’s direct price is not known, and thus the price listed by the Ad network could fluctuate.

RTB – stands for real-time bidding. This is a complex process that happens in a fraction of seconds. When you click on a website, the SSP gathers your relevant information through cookies and sends them to the DSP. The DSP then places a bid for that ad space in the Ad exchange or Ad network. Now automatically, the highest bid is chosen. All this happens between the time you click on a website till the website loads. As soon as you load the website, you see the advert on the website. This process is real-time bidding.

Tracking – Tracking is how the ad exchange or ad network tracks where consumers are coming from website adverts, or links in search results, through emails, or through social media. It tracks your campaign and thus increases impressions and reach.

How does programmatic advertising work?

So, as an advertiser, you use an ad exchange or ad network to pay for your campaign to get advertised on different websites, social media, web pages, and emails.

  • DSP and SSP do proper audience targeting. Thus it is ensured that your advertisements reach audiences who have shown interest in campaigns and topics similar to yours.

  • Real-time bidding makes the process very fast and quick.

  • Further, through tracking, you can track the platform through which you get maximum impressions and reach. This makes the entire process of marketing a campaign online much faster, more comfortable, and efficient.

Author : Auhsini Das

About Her : With a Data Science degree from IIT Madras, Aushini enrich audience with her high quality tech articles. Having +5 years of experience in content writing, She work passionately to create copy that converts, with a focus on maintaining your authentic brand voice.


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