MP PROGRAMMATIC SSP Behavioral targeting Private Ad Exchange/Marketplace ATA Cookie FREQUENCY CAP Behavioral BUYING Targeting Retargeting Look-alike modeling DSP VIEWABILITY IMPRESSION ADEXCHANGE Site Buys Programmatic buying DECISIONING PROGRAMMATIC Terms, Concepts, and the Future of Digital Advertising Contextual targeting RTB
THE DIGITAL LANDSCAPE Programmatic one of the latest buzzwords to hit the ad tech landscape is generating a huge amount of excitement in the industry. While media, marketing and ad tech professionals alike are championing programmatic buying, there is still some confusion over what it really means. As the landscape continues to evolve, it becomes more and more important for advertisers to understand how the latest buzz impacts efficiencies and effectiveness. This is increasingly important with programmatic buying. This beginner s guide outlines the fundamentals of programmatic and the key terms associated with the development of this automated process. Defining Programmatic Audience Buying 101 Utilizing Big Data 1
Programmatic buying is playing an increasing role as a brand-building, topof-funnel activity for our global advertising clients. Kelly Clark Chief Executive Officer GroupM North America
DEFINING PROGRAMMATIC The term programmatic typically refers to the automated process of buying and selling of digital media through software. WHERE BRANDS & AGENCIES SAY THEY WILL INCREASE PROGRAMMATIC SPENDING IN THE NEXT SIX MONTHS 58% 53% 54% 18% 10% 54% Display Mobile Video Social Search TV *Forbes By removing tedious, manual labor, programmatic technology makes ad buying cheaper, more efficient and more reliable. That is why more and more advertisers and publishers are buying and selling media through programmatic channels instead of open exchanges. 3
BIDDING WITH RTB Before programmatic technology spread throughout the digital marketplace, publishers made their inventory available through ad exchanges and real-time bidding (RTB), which allowed for greater transparency and more reasonable market value prices. PUBLISHER ADVERTISER PUBLISHER SSP DSP ADVERTISER PUBLISHER ADVERTISER Supply-side platforms (SSPs) allowed publishers to optimize inventory in real-time, creating virtual pipes into exchanges. Demand-side platforms (DSPs) allowed advertisers to acquire inventory by providing access to inventory in a biddable environment. As platform technology matured, programmatic evolved to distinguish itself from traditional ad exchange buying. Buyers and sellers were able to negotiate quality and quantity of publisher inventory, open up new channels of digital messaging and employ highly customizable targeting through anonymous consumer data. 4
AUDIENCE BUYING 101 RTB introduced the idea of one-to-one addressability for serving ads. This led to a new development in the ecosystem: direct audience targeting. Publishers and third-parties alike could now make demographic, browsing, purchasing, and behavioral data available for targeting purposes. With innovative tools and more precise targeting tactics, RTB empowered advertisers and publishers to accurately pinpoint specific segments of consumers. Contextual Targeting Content as a proxy for audience Audience Buying Audience without proxy Target Outside Target 5
UTILIZING BIG DATA With the amount of data now available, sophisticated advertisers can look beyond traditional click-based metrics and pre-defined audience segments. Data begins with a cookie a file that is notpersonally identifiable stored on your computer to inform how users interact with ads and how campaigns are running with audiences. Cookies are the foundation behind a personalized online experience. This anonymous data enables highly customizable audience targeting through the use of data management platforms (DMPs), which compile campaign and audience data into one centralized location and ultimately help optimize media decisioning. 6
More than anything else, data provides leverage in a programmatic media buying world. The more anonymous data you have about a user, the more efficient you can be about your buying. Brian Lesser Global CEO Xaxis
SO NOW WHAT? As programmatic continues to evolve, advertisers will seek out competitive advantages in gaining media programmatically. And as consumers have increasingly more choices in the content messages they view, they will choose messaging that is unique, relevant and timely. Fortunately, Xaxis has the dynamic combination of innovation, scale and skill to take brand messages and make them not only relevant, but welcome. Marketers can cut through the industry noise to reach specific consumers and consumers are delivered messages tailored just for them. Xaxis propels digital media campaigns towards success. Xaxis makes advertising welcome. 8 Ultimately, all advertising will be digital and all digital advertising will be traded programmatically. Brian Lesser
GLOSSARY A Ad exchange: A technology platform that enables advertisers and publishers to buy and sell media inventory, such as display, video and mobile. Ad network: Brings together inventory and audiences to enable advertisers to buy online ad impressions. Ad server: A computer server dedicated to storing digital advertisements that are then displayed on websites. Ad servers can be operated by publishers, or by a neutral third party to track impressions, clicks, and conversions. Ad tracking: A method used to check the number of hits or clicks an ad receives. A useful tool for discovering where the most revenue comes from, and how to better personalize ads to reach more customers. Attribution: A methodology by which credit is assigned for conversion activities driven by media. Audience buying: The use of data and technology to reach target consumers regardless of context. B Behavioral targeting: The use of data and analytics to tailor digital ads based on a consumer s online behavior. C Contextual targeting: The use of data and technology to target a specific individual based on the context of the site. Cookie: A browser-specific anonymous persistent identifier used online to track certain information about a user s web behavior and attributes. 9
D Decisioning: The process by which an advertiser employs automated systems to determine the creative execution, the target audiences, and specific publishers during a media campaign. DMP (data management platform): A data warehouse that collects, organizes and houses data pertaining to campaign performance, client data, and audience attributes. DSP (demand-side platform): The technology used by advertisers and agencies to buy digital ads in real-time through programmatic buying. F First-party data: Data that is collected directly from a consumer. Frequency cap: The maximum number of ad impressions an advertiser or agency is willing to serve to an individual user to ensure optimal exposure to messaging. I Impression: The single instance of an ad delivered to a user on a webpage. L Look-alike modeling: A technique in which high-value audiences are used as a seed within an algorithm to create prospective audiences most likely to behave in the same manner based on similar attribute patterns. O Open exchange: An open market system in which any seller can make digital inventory available for purchase by any buyer. P Private ad exchange/marketplace: A biddable environment in which a publisher can limit access to inventory to certain advertisers and set pricing rules. Programmatic: The technology used to implement an automated set of ad rules to efficiently target the most valuable customers and prospects with personalized ads using anonymous data. 10
Programmatic buying: An automated method of buying digital advertising in which supply and demand partners make decisions on a perimpression basis and adhere to business rules as provided by the operators of each platform. R Retargeting: A programmatic marketing technique in which users who have visited a website are delivered messages based on that user s previous site interactions. RTB (real-time bidding): A method used within an ad exchange by which individual impressions are bought at the time a user visits a site. S Second-party data: Data that comes from a direct agreement with a publisher. Site buys: Media acquisition by agencies and advertisers through a direct relationship with a single publisher, which typically include the best inventory as well as customizable offerings. SSP (supply-side platform): An automation technology that is used to optimize publisher yield and deliver advertising inventory directly to a publisher as well as to automated ad exchanges. T Third-party data: Data that is collected from a source that doesn t have a direct relationship with the consumer. V Viewability: A measure of whether or not an ad that has been served can be seen by a user. NOTES 11
ABOUT US Xaxis is a global digital media platform that programmatically connects advertisers and publishers to audiences across all addressable channels. Xaxis combines proprietary technology, unique data assets and exclusive media relationships with the brightest team of audience analysts, data scientists and software engineers. Advertisers working with Xaxis achieve higher ROI from digital marketing campaigns. Publishers deliver relevant content and advertising to new and valuable audiences. Xaxis works with over 2,700 clients across 33 markets in North America, Europe, Asia Pacific and Latin America. For more information, visit www.xaxis.com. For more information: Matthew Sweeney SVP, Sales matthew.sweeney@xaxis.com www.xaxis.com 12
MP PROGRAMMATIC SSP Behavioral targeting Private Ad Exchange/Marketplace ATA Cookie FREQUENCY CAP Behavioral Targeting Retargeting Look-alike modeling DSP VIEWABILITY IMPRESSION ADEXCHANGE Site Buys Programmatic buying DECISIONING Contextual targeting RTB