Programmatic Advertising 101: Supply and Demand

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Programmatic 101 Supply and Demand

Programmatic buy side vs sell side  infographic


What is Programmatic Advertising Supply?

Supply in the world of Programmatic is in simplest terms the inventory that a publisher has available to monetize. Supply is the actual impression of the user that views an advertisement on a web page. There are billions of impressions on the internet each and every day and an overwhelming amount of supply that is monetized by various demand sources and a slew of different advertisements and creatives. Programmatic gave birth a whole new level of optimization and the ability to value every impression as the market dictates.

Not All Supply Is Created Equal

When you go to buy a car, your not going to pay the same price for a Lamborghini as you would pay for a used 1991 tincanmobile.. The same goes for Supply in programmatic.

Supply is categorized into different tiers that makes it transparent what is being bought (for the most part) Advertisers who are spending ad dollars in a RTB environment will give a higher CPM for certain geographic locations, placement on the page (size, above or below the fold) frequency cap of the user to see your advertisement and even pay different rates on different devices. Supply Side Platforms specialize in aggregating, organizing and offering supply to the market at different price points.

As a rule of thumb, the most expensive digital ad inventory tends to be:

  • Supply from the United States, above the fold on a 1 per every 24 hour frequency cap.
  • Top Alexa ranked URL

What is Programmatic Advertising Demand?

You can have unlimited supply but you need quality demand to fill it. Demand is simply encompasses the advertisers, advertisements and sources from where they are all aggregated. The Programmatic ecosystem is built upon the concept that having advertisers bid against each-other will yield the highest CPM’s for publishers.

Publishers who expose their inventory to programmatic platforms are putting their inventory in the open market and let the advertisers compete for the inventory and in turn, drive up the value. High performing inventory that converts users will always be extremely valuable to advertisers and be bought and even resold in some situations. Demand Side Platforms specialize in aggregating  different tiers and quality levels of demand sources to pair up with inventory.

programmatic advertising 101 demand

Congrats, with this knowledge you have passed Programmatic Advertising 101. Keep on learning and you will be a digital advertising guru in time!

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