The Mini Ecosystem of a Programmatic Ad Network
How A Programmatic Ad Network Works: Analysis
You may have once asked the question to yourself – how is a programmatic ad network structured The goal of programmatic advertising is to serve a creative to the right user on the right device at the right place at the right time while continually optimizing the bid for both the advertiser and the publisher. Mind blown yet? I hope not because we are just getting started! Programmatic can be a hard concept to grasp but it’s an extremely high in demand industry – a breeding ground of new technology, digital advertising titans, fish both big and small and where relationships are everything and nothing is guaranteed! It’s about Supply and Demand.
Alright.. Here’s is a video to clear things up:
Now you have had your refresher course in RTB, let’s go back to the main purpose of this post, to give you a basic understanding of how a high performing ad network touching multiple points of the lumascape is generally structured. Here you go!
Programmatic Ad Network Supply – The Publishers
It is important for an ad network to have a solid supply division that sources out, closes, optimizes, grows new revenue streams and provides high CPM’s to publishers who are in the network. While the supply division of a programmatic ad network may not be truly what one would call a “SSP” like a Rubicon, or PubMatic, this division in the ad network has the same driving principle of generating revenue for publishers and can both compete with SSP’s and buy SSP inventory at the same time. This is what one would called a “Frenemy”
You can further divide a supply division into two main sub groups: Account Management and Publisher Sales. Publisher sales are responsible for soliciting, and closing insertion orders to media buy on a publisher for either a Revshare, Floor CPM or Fixed (Flat) CPM. They are account executives who bring in new business. Account Managers are responsible to send tags out to the client, optimize the placement and grow the relationship.
Programmatic Ad Network Demand – The Advertisers
The Demand team is responsible for managing the relationships that drive external advertiser demand (they hold a large % of brand dollars and spread them across high performing ad networks) as well as internal managed advertisers and demand partners. They work alongside account management to optimize campaigns, identify opportunities and hedge risk on publisher media buys
CPA Performance Network – Affiliate offers
A successful programmatic ad network will work with affiliate networks or have their own in house offers to arbitrage and optimize cost per acquisition campaigns on their vast supply of tiered inventory. CPA networks have large amounts of niche offers that can be lucrative for the affiliate and ad network, which trickels down to higher eCPM’s for publishers. Long tail remnant impressions also are sometimes hard to fill with CPM bids so CPA campaigns are threaded through to reduce the change of serving public service announcements (PSA’s) which generate no revenue and waste impressions.
Quality Assurance/ Finance – Paying Publishers and Advertisers
It is important for a programmatic ad network to pay their clients on time and for the correct amount. Most ad networks who work with premium publishers pay net 30 days for revenue generated or even net 15 to seal lucrative long term deals with major websites who rank high on alexa and similarweb.
Publishers who get paid on time and for the correct amounts of revenue will naturally send more volume to the programmatic ad network. It is also important to pay on time for the sake of maintaining a good reputation to the internet as a whole. Large websites tend to stay away from ad networks who do not pay on time and have a history of issues in this department.
Want to Learn More about Digital Advertising? See the below:
- Programmatic Ad Impressions Transact in 200 Milliseconds
- The Programmatic Creative: Solving the Achilles Heel of AdTech
- 4 Factors to Determine the Value of your Ad Inventory