What is Programmatic Advertising?
Programmatic advertising is the automated buying and selling of digital ad inventory using real-time bidding (RTB) and machine learning. Unlike traditional ad placements, which rely on direct negotiations and manual insertion orders, programmatic advertising leverages data to deliver targeted ads at scale across websites, apps, and connected TV platforms.
Key Benefits of Programmatic Advertising
Efficiency – Automates ad buying, reducing manual work.
Precision Targeting – Uses data-driven segmentation to reach the right audience.
Real-Time Optimization – Adjusts bids and placements dynamically for better performance.
Scalability – Enables advertisers to access vast ad inventory across multiple publishers.
Key Actors in the Programmatic Advertising Ecosystem
Several key players interact to make programmatic advertising work:
Advertisers & Agencies
Advertisers (brands, businesses) want to promote their products and services.
Agencies manage campaigns, optimizing audience targeting and budget allocation.
Data Providers & Identity Solutions
DMPs (Data Management Platforms) like Loop help advertisers collect, segment, and activate data.
Identity graphs (e.g., LinkID, CoreID) match user identities across different devices and channels.
Ad Tech Platforms
DSPs (Demand-Side Platforms) allow advertisers to bid on and buy ad impressions.
SSPs (Supply-Side Platforms) enable publishers to sell ad inventory to the highest bidder.
Ad Exchanges act as digital marketplaces where DSPs and SSPs connect.
Publishers & Ad Inventory
Websites, apps, and connected TV platforms provide digital spaces where ads are displayed.
Publishers use SSPs to sell their ad inventory to advertisers in real-time auctions.
Example: A Car Dealership Advertising on a News Website
To illustrate how programmatic advertising works, let’s use a newspaper website as a publisher and a car dealership as an advertiser:
The Client (Car Dealership) Hires an Agency
The dealership wants to promote its new SUV models.
They work with an advertising agency to plan a digital campaign.
The Agency Uses Loop for Audience Targeting
The agency uploads the dealership’s first-party data (e.g., website visitors, CRM lists) to Loop.
They use LinkID and CoreID to enhance audience reach and improve targeting.
Loop segments users based on interest in cars and previous engagement.
The Agency Bids for Ad Space Using a DSP
The agency selects a DSP (e.g., Google DV360, The Trade Desk) to reach potential customers.
The DSP bids on ad inventory available on the newspaper’s website via an Ad Exchange.
The Newspaper’s SSP Accepts the Winning Bid
The newspaper uses an SSP to auction its ad space.
The highest bidder (the dealership’s agency) wins the placement.
The Ad is Displayed to the Right Audience
A potential customer browsing the newspaper’s website sees an SUV ad.
The ad is tailored based on their browsing history and demographics.
Performance is Tracked and Optimized
The agency monitors clicks, impressions, and conversions.
Loop helps refine the audience strategy for future optimizations.
How Loop Enhances This Process
Loop plays a critical role in data collection, audience segmentation, and activation, ensuring:
Better audience insights through first-party and third-party data integration.
Improved match rates using LinkID and CoreID for identity resolution.
Seamless activation across DSPs for efficient ad delivery.