Unleashing Programmatic Advertising's Potential

All automated buying of media is referred to as programmatic buying in digital advertising. By that definition, even search and social which are biddable mediums come under its ambit. However, here we are referring to media buying through demand-side platforms, which are connected to ad exchanges which in turn are connected to all supply sources across the internet excluding search and social. The buying and selling of ad slots (or impressions) are carried out through an auction mechanism, where several DSPs (Demand Side Platforms) bid for what they consider a valuable audience or impression through a first-price auction. The highest bidder gets the chance to serve an Ad to a particular audience on a particular page at a point in time. 

There have been multiple advancements in this data-led programmatic approach where clients, marketers and media buyers can either utilise their own collected data (first party) or second-party or third-party data along with existing targeting parameters implicit to the DSPs to buy either media or audience most efficiently. The core principles of such a method of media buying wrest on the below factors:

• Ease of use- Automated buying and selling of inventory, less human intervention, less chance of mistakes
• Audience segmentation- Laser sharp niche targeting and retargeting are possible through programmatic channels
• Optimisations of media spends- Avoiding spillage & frequency suppression. This helps marketers extract the maximum value of their ad dollars by controlling exposure to ads a day, week, month and yearly campaign duration level
• Transparency- The ability to tap into high-quality supply and audience at the top priority levels of an ad server (publisher or supply side) facilitates this
• Retargeting capabilities- By bucketing users of different kinds into different profiles through audience collection, based on the different levels of interaction they have had. For example, exposed to an ad impression, clicked on an ad, landed on the advertiser landing page, viewed a certain portion of the video ad
• Real return on investment (ROI) measurement is possible- Measuring ROI cross channel helps understand channel levels contribution and helps allocate ad budgets in the most optimised manner
• It is expected that programmatic buying of digital media will reach a share of 42 per cent (Rs 11,659 crore) by 2022. We expect it to grow with a CAGR of 37.35 per cent to reach a spend share of 45 per cent (Rs 16,114 crore) by the end of 2023

Digital by itself is expected to show a projected growth of 27,759 crores by end of 2022 and 35,809 crores by end of 2023 based on which the share of programmatic is calculated to be 42 per cent and 45 per cent in 2022 and 2023 respectively, says a dentsu report.

Luma Landscape – Highlighting various entities involved in end-to-end programmatic advertising

Supply Side Platforms or SSPs
 This is an ad-tech entity which is aligned completely with the publisher or supply side of the business enabling publishers to drive maximum revenue from ads served on their site. With programmatic advertising attaining scale, a whole lot of advertisers started buying ad inventory at a cheap rate hence there was a need for a platform which can help publishers improve their yield and ensure better fill rates.

How do SSPs help publishers increase yield?
 The primary function of SSPs is to help publishers (websites) connect to ad exchanges by initiating bid requests which is nothing but a call to fill an ad request for an ad slot on a particular page of the website. Ad exchange in turn sends that request to DSPs which then match it with the requirements of the campaigns, audience matching through cookies, the worthiness of that ad slot and respond with a bid amount if deemed feasible.

Main features of an SSP in the buying process

• Real time bidding- On publisher's inventory or ad slots in an automated manner
• Yield optimisation- Ability to set price floors on the supply-side to ensure yield optimisation and also ensure publisher inventory is sold only above the price floor. They also allow help in managing bidding logic and thereby improving fill rates
• Brand safety and relevancy- SSPs allow publishers to implement blocklists at their end to ensure only quality ads run on them thereby ensuring brand safety and not running questionable or unsafe ads
• Consolidate platform for management and reporting- Publishers can work with a single SSP and ensure they know exactly which way each of the DSPs is performing on them and control over which DSP will be able to bid and which won't. It helps them get a single user interface to track different inventory sources, impression volumes, fill rates and performance

Some popular SSPs in the market are Magnite, Pubmatic, Sovrn, Sobi etc. 

Ad exchanges- While the term SSPs and ad exchanges are used interchangeably, they are not the same. Ad exchanges is an ad-tech entity which is an aggregator of several SSPs, whereas SSP is an aggregator of a number of sellers or publisher websites.

Ad exchanges stand in the middle of the supply chain of ad tech and are more of a marketplace which connects to DSPs on one side and SSPs on the other.

How do ad exchanges act as a virtual marketplace and what are the advantages of both the buy side and sell side connecting to them?

• Open exchange:Open exchanges are used wherever scale is required to be achieved for a particular campaign and has less amount of visibility in terms of where exactly are ads being served
• Private market place: Allow for a more closed group arrangement between bidders and publishers who exert greater control as to who exactly can participate in the bidding process thereby ensuring that not only the concerns about digital fraud are removed but also the quality of inventory is very high compared to open exchange. There still exists an auction in this case where the buyer is expected to bid above a certain floor price
• Preferred deals: These types of deals are similar to a private marketplace deal wherein only selected buyers can participate. The fundamental difference is that there is no auction or bid here. All ad buying happens on pre-negotiated rates

Some of the popular ad exchanges in the market are Google Adx, Magnite, Rhythm One, Open exchange.

The popular initiative undertaken on the supply side- Header Bidding(Pre-Bid) versus Waterfall:

• Header bidding: It is a way in which the publisher initiates an ad request simultaneously to multiple demand sources or exchanges at the same time. Since the tag is placed on the header of the page, hence the name. 

When the publisher's page loads in the user's browser, the bidding code in the header initiates simultaneous calls to exchanges like Rubicon, PubMatic, Index, Xander etc. These exchanges then hold an auction within the short window that the site loads before sending a call to the publisher ad server and once the auction is complete, then it sends the bid to the highest paying bidder.

The difference here lies in the fact that this is a clear deviation from the waterfall model wherein firstly, the publisher ad server is called, which then initiates an auction after its direct order is exhausted. However, in the case of header bidding publisher, the ad server is called and after the call is made to exchanges first. Secondly, in the waterfall model, there is a demand bid which can beat the direct order it still would come priority wise and many times money is left on the table. However, in header bidding, an open exchange bid can also compete with the direct and indirect orders because the highest bid is already calculated before the ad server call.

Advantages of header bidding

Demand Side Platforms- DSPs are an integral part of the ad-tech supply chain and primarily can be thought of as an automated media buying platform. They lie on the exact opposite side of the SSPs in the supply chain ecosystem. Simply put DSPs are connected to SSPs through an ad exchange and help marketers buy display, video and audio inventory through a single platform.

Generally, any buying platform like social and search which helps a buyer access inventory would also be called a DSP. But here, we would keep our ambit to open web inventory where impressions are bought through auctions.

Let us look at some of the advantages that DSPs offer to marketers:

• Scale: DSPs provide significant scale and are a one-stop solution for all kinds of inventory across exchanges
• Targeting: In addition to implicit in-market & affinity segment targeting, geo-targeting, income-based targeting, and channel/genre level targeting, it also allows one to use first-party, second-party and third-party segments for targeting
• Retargeting capabilities: The ability to collect click data, landing page data and DSPs are the major players in implementing retargeting capabilities
• High-quality inventory: DSPs are usually exposed to high-quality inventory
• Viewability and brand safety: DSPs either have inbuilt trackers for the same or third-party services like IAS and MOAT can be integrated to ensure quality delivery

We will study some of the well-known DSPs and try to understand how they differentiate from each other:

• DV360 (Google DSP):DV360 has the largest market share in the market as far as programmatic spending is concerned. Primarily owing to the exclusive access to YouTube inventory and about 70 per cent market share of open exchange inventory in India. Inventory access is the display, video (YouTube and open exchange), programmatic audio and CTV. However, this is a walled garden DSP as it is difficult to move audience data out of the ecosystem, hence no inter-operability of audience data is possible.
• Yahoo DSP: Yahoo’s e-mail receipt and travel itinerary data is the primary signal for targeting audiences in addition to demographic targeting. Inventory access is display, open exchange video, programmatic audio, CTV and programmatic DOOH. Omniscope is another omnichannel capability of Yahoo which uses machine learning to attribute and measure all spends across Yahoo inventory.
• The Trade Desk (TTD): TTD was launched in India in June 2021 and is one of the prime proponents of the open internet. They are the major force behind the development of the Unified 2.0 identity solution which will help marketers in operating in a third-party cookie-less environment by allowing publishers, SSPs and DSPs to operate on a consent-based mechanism to establish identities.
• Amazon and Flipkart DSPs (ecommerce): Owing to the huge amount of purchase data that both these players have, it is only justified that they are also in both managed and self-serve DSP offering. As far as display ads are concerned, both these players currently offer on-deck inventory only in India.
• Criteo (remarketing):Criteo has again partnered with various retail partners to develop best-in-class retargeting solutions and is making inroads in India now.
• Taboola & Outbrain (native):Native DSPs depend on contextual signals to serve ads which are very similar in experience to content and hence appear as native content rather than intrusive paid media ads.

Platforms in the programmatic ecosystem

Agency Trading Desks: Thisis the trading arm of a media agency which is used for planning, buying and centralised optimisation, reporting and analytics of digital media campaigns under a single umbrella of the holding group.

Some of the popular ATDs in India are Xaxis (GroupM), Cadreon (IPG), Vivaki (Publicis Media Group). DDB Mudra has also developed an ATD of our own called Bingo.

 Bingo is a single platform to not only analyse but implement learnings and break the duopoly. Agency Trading Desks are inherently deployed to consolidate digital media buys under a single umbrella across open exchange, programmatic guaranteed and non-guaranteed supply and biddable. In short, for all of your digital media buys like standard banners, videos (any length), page takeovers and roadblocks, we have you covered.

With Bingo, we go a step further by putting a technology layer above all downstream channels also called buying platforms like Facebook, Google, Dv360, Trade Desk, Media Math. This is to enable cross-channel optimisation and platform agnostic buying. A simple layer which facilitates objective buying with the option to set primary and secondary goals covering the entire spectrum from top to bottom funnel in the most transparent manner.

Benefits

• Media buying efficiency with automated optimisation
• Objective-based media buying
• Value for money
• Complete transparency
• Control overspends
• No native platform dependency
• State-of-the-art visualisation
• End-to-endsupport
• Read andwrite access
• Completely managed service 

Data Management Platforms (DMPs):Data Management Platforms form an integral part of the programmatic ecosystem by acting as the centralised repository of all kinds of data be that online, offline or interaction data and organise them into first-party, second-party and third-party data for segmentation, enrichment and activation.

Effective use cases of DMP:

• Audience targeting: Specify audience buckets as per a pre-defined taxonomy, segment them and retarget via display and video
• Personalisation: Deliver personalised experiences not only from retargeting use cases but also content recommendation use case
• Audience data enrichment: Merge first-party data with second and third-party data for enrichment to understand their horizontal behaviour across the internet
• Cross channel activation of data: Breaking the silos existing among channels, collect data from all channels and activate that in a cross-channel manner
• Lead suppression across channels including social and search: Exclude certain audience based on interaction across channels to then reach out to newer consumers

Open RTB – Latest 2.6 (Source IAB Techlab)

Open RTB is a project of the IAB Tech lab defines the communication protocol for the real-time bidding environment. It was developed to provide an open industry standard for communication and interoperability between sellers and buyers in the ad tech supply chain.

It was first launched as a pilot project in 2010 between MediaMath, Turn and Data Xu. It has come a long way since then and the latest protocol was released in April’22. 

Location-based advertising (Proximity targeting)

Location-based advertising has been one of the recent trends in programmatic advertising where the drive-to-store campaigns as well measurement of footfalls is implemented by enhanced geo-fencing capabilities.

Up until 2021, beacon-based technology utilised Wi-Fi and Bluetooth capabilities to geo-fence Point of Interaction. However, due to increased costs and restrictions around beacon-based technology, they were done away with.

What solutions are being used now for location-based targeting or proximity targeting? 

At this point, GPS-based geo-fencing is being deployed to measure the point-of-sale football and attribute the same. It is also being used to record consumer device IDs of consumers visiting a previously geo-fenced area and any ad request initiated in that vicinity will lead to the SDK-based tracking being done.

The user device ID visiting particular places like quick service restaurants, malls and cafes will then be used to make further lookalike audience of that data and targeted across mobile app ads.

Competitor targeting: One of the greatest uses of location-based advertising could also be geo-fencing your competitor store/outlets and then creating a lookalike of that audience for both retargeting and new consumer acquisition.

Mobile Advertising:

We are amidst an advertising anomaly where we think every ad that we see is driving some or the other results. However, looking at the importance of reaching the right audience, the attention span of the audience and whether we are taking the right efforts is the question each digital marketer should ask themselves and if mobile advertisement ever help drive the desired result.

Let’s look at the mobile handset getting sold in India. Whopping 19,406 handsets are sold per hour. It is a shocker that in 2021, the volume of smartphone shipments across India was around 160.7 million. 

The seed was sowed back in 2016 with Jio, post which we observed a tectonic shift across digital. Digital transformation and mobile tech moved up a notch right before our own eyes and that helped mobile advertisement get a ride with accelerated growth during the pandemic while life got locked in screens.

Mobile marketing is an important part of today’s marketer’s media mix. It can be easily customised to reach out to different sets of audiences and communicate far more effectively than traditional channels. Like hyper-personalised content and real-time data, the possibilities of reaching out beyond reach onlookers are huge. Mobile phones are today's personality extensions, quite literally.

Spends on desktops stood at 25 per cent (Rs 5,338 crore) out of a total of Rs. 21,353 crores at the end of 2021. While the mobile advertising spends are 75:25 in the mix, it is expected to grow to 80 per cent by 2025 because of the upcoming 5G bandwidth. 5G can play a vital role with benefits of at least USD 455 billion in the next two decades.

Mobile marketing trends in India:

• A non-IDFA world
• Mobile video soaring high
• Mobile-first consumer intelligence
• Mobile payment apps, merchants and audience data
• Mobile commerce
• Rise of branded stickers
• Mobile streaming
• Precision marketing

Abhishek Sharma

Guest Author Partner – Digital and Lead – Programmatic, DDB Mudra Group