October 1, 2020

Brand, Media & Advertising

Layman Series: Everything you need to know about programmatic advertising Part-3

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Layman series is an educational initiative to explain the most complex but critical topics and concepts in media and advertising in a very simple language. The inspiration comes from a learning technique called “The Feynman Technique” named after noble prize-winning physicist Richard Feynman. 

I explained realtime time bidding (RTB) a core component of programmatic media in the 2nd part. If you haven’t read part 1 and part 2 please read it to understand all the subsequent articles on programmatic.

This is part 3 of my Layman series on “Everything you need to know about programmatic” and in this, I’m going to explain what is adserving and how does it work?

Adserving in simple terms is the process of placing a banner ad on the website or app at any place as soon as the user visits the website. Remember the process of serving an ad takes place in seconds with the help of real-time bidding an auction process where hundreds of advertisers bid to buy one impression i.e showing their ad to the user.

The job of ad serving is done by a tool called adserver which are generally used by publishers like TOI, NDTV, and apps who want to sell the ad spaces to advertisers, and these are called first-party ad servers. Ad servers are also used by advertisers and we call them 3rd party adserver. I will explain the difference between these 2 later in this article.

Initially, when there were no adserver the ads were hardcoded and fixed on the website by publishers for particular advertisers but this was inefficient as publishers would show the same ad to everyone coming to the website and brands had to waste marketing dollars in reaching people who would never buy and were not the right audience. Lack of adserver also dint allow publishers to scale as the ads formats were not standardized which means there were no set or fixed ad sizes that we have today like 300×250, 300×600 e.t.c so they had to manually code each and every ad on the website.

When the adserver came they solved these problems and became a key part of the programmatic ecosystem.

Think of adserver a container that hosts ads to be displayed on the website. Apart from hosting ads ad server also reports impressions, clicks, and other performance metrics of the ads.

Since we know what is adserving now let’s understand how does it work?

Let’s understand this entire process with an example in different steps. Suppose you visit news18 the process starts in the following steps:

  1. As soon as you visit a website web-browser sends a publisher’s web server asking for the content in HTML format it’s the content that you would see and read.
  2. The publisher’s web server returns the content and along with empty ad slots which need to fill with an ad in seconds.
  3. A request is sent to the publisher’s ad server to fill the ad slot with an ad.
  4. The publisher’s ad server (first-party ad server) sends back the ad in the form of a Javascript tag to the website and the ad is displayed.

One point to note that in the programmatic ecosystem third party (advertiser) adserver has a prominent role and the only difference between the process of adserving using a third party adserver and first-party adserver is that in case of third-party ad server creatives/ads are hosted in it and they also help advertisers/brands to manage the ads to be displayed across multiple publishers and gives a report of impressions, clicks, conversions e.t.c.

Third-party vs first Party ad servers:

  • First-party ad servers are mostly used for direct deals/campaigns between publishers and advertisers.
  • Third-party adserver is used to consolidate campaign data across all multiple publishers/apps in one dashboard.
  • The third-party ad server also helps to verify data such impressions and clicks on a particular website.

In part 4, I will explain all the players/intermediaries between brands/advertisers and publishers who facilitate the entire process of programmatic media buying. Remember the ecosystem is complex with multiple players on both publishers and advertisers side.