A detailed guide for understanding all things Programmatic.
Without question advertising and marketing are becoming more and more complex in conjunction with the evolution of data and technology. ‘Adtech’ and ‘Martech’ are used interchangeably by marketers and agencies as umbrella terms to classify the array of different platforms that allow for data-driven media activation, optimization and measurement.
As a marketer, it can be difficult to navigate all the different technologies and their main purposes, and understand the differences in how they collect, store and define various data assets. Frequent questions include:
- Where does data come from?
- Where are certain types of data stored?
- How does data from different technologies connect?
Marketers need to make informed decisions on what advertising technology is needed for reaching defined business goals and marketing objectives. Here is a guide that will enable the industry to answer the above questions and Know Your Tech:
COMMON DATA ASSETS ACROSS THE AD TECH STACK
Below are the key terms you need to be familiar with that are essential to understand the foundations of Programmatic Advertising.
Unique Anonymized ID (Cookie ID/ Advertising ID)
A unique capability of digital advertising is the ability to identify characteristics, behaviors and attributes. For this to be possible, a unique identifier or fingerprint is needed to distinguish between users. Cookie IDs on websites and advertising IDs on apps allow websites and servers to distinguish a user by their unique ID. This collection of data about user activity allows for a website or app to remember preferences, logins and historical behaviors, as well as enable advertisers to target those users with ads online based on those attributes – provided the right permission and consent has been given by the user. It’s important to note that only non Personally Identifiable Information (non-PII) data can be collected and stored by websites, apps and third parties for the purposes of advertising, and this can only be done with the explicit consent of the user.
Personally Identifiable Information (PII)
PII refers to user data such as name, home address, email address, contact number and date of birth that can be used to identify the user, either directly or through a lookup. Non-PII and PII fall under the umbrella of personal data, and the collection and use of this data is restricted under General Data Protection Regulations (GDPR). The far-reaching effects of this regulation extends beyond Europe, impacting businesses which are processing data collected in the EU. It is thus important for all organizations to exercise due diligence to ensure that their business, network and partners are GDPR compliant in this highly-connected industry.
Before an ad is served, it is crucial to retrieve browser information from the cookie prior to bidding on an impression. Browser information can contain the actual browser name e.g. Safari, Internet Explorer, Chrome, and version number e.g. Internet Explorer 11. This information, in combination with other data points, is used in a number of ways. It can be used by an ad server to ensure the correct creative asset is deployed as well as fed back to a demand-side platform (DSP) for campaign optimization and analytics.
Operating System (OS) Information
With the majority of online activity and media consumption now happening on various mobile devices and across multiple apps, it is no longer sufficient to collect and store desktop information as an attribute as you run the risk of missing out on a large portion of hugely valuable mobile information. As online activity and media consumption evolves and emerges across other device types e.g. connected TVs, smart speakers, Apple watches, OS Information such as device manufacturer, OS and device type data e.g. Android > Android80 > Mobile will become even more important for digital advertising as users.
Location/ Internet Protocol (IP) Data
Location and IP data are primarily used to determine the geographical location of an individual’s computer or device before an ad is served. The IP can determine the country, region or city of where the computer or browser is located, and it is derived from the network information of which the IP is connected to. For mobile devices, which aren’t static by nature, determining the actual location can be based on other data sources such as GPS or Wi-Fi signals.
Timestamp/ Time Zone
With most marketing and media campaigns being either regional or even global, determining the timestamp and time zone of a browser or user is important for ensuring that the ad is served at the right time. This is not only useful for accurate targeting, but also for analyzing media impact and performance over a certain period; when it is necessary to understand the timestamps of when a browser or user was exposed to the ad, engaged with it and ultimately performed the desired action based on campaign objectives.
An ad server is a web based tool used by publishers and advertisers to run and manage online campaigns – making instantaneous decisions to deliver ad content to sites and apps based on predefined targeting criteria. Along with delivering ad content to users, the ad server also helps with campaign management, ad trafficking and campaign reporting.
Conversion/ Action/ Clicks
A conversion, action or click is a metric that an advertiser has defined as valuable to their business. These can range from the final sale or online purchase, through to pathway actions that measure the path to final conversion. These can include store visits, app downloads, newsletter sign-ups, lead form submissions and website actions. Through tracking smaller micro-actions along with the final conversion, brands can get a fuller view of what’s happening along the customer journey – providing insight for campaign optimization and identifying issues or barriers that are preventing customers from converting, if this is the goal of the campaign.
Custom Variable – Revenue, Stock Keeping Unit (SKU), Product Category
Custom Variables are designed to capture information that is specific to a brand’s or business’ needs. A custom variable can be used to track and report on almost any data gathered about your audiences and passed back to the ad server. The effective use of custom variables is important for creating custom audience segments.
Examples of custom variables include:
- Product Information: Details of the product, SKU, or category of product that was viewed
- Revenue: The basket size or value of purchases made by any user to your site, linked to the product and category
- Visit Type: Understanding if a site visit is being made by a first time or existing customer and whether this user is a registered member logged into their account
Utilising dynamic creative optimisation (DCO) enables brands to deliver personalised, contextual ad creatives at scale. Using flexible templates, a standardised list of elements within the creative can be dynamically adapted to deliver tailored messaging. Most elements of an ad creative can be adapted dynamically including product and background image, logo, text, and call-to-action.
Dynamic elements of the ad can be adapted based on a number of factor including:
- The content of the page that a user is currently reading e.g. tailoring flight deals to the destination the user is currently reading about
- The users live location e.g. promoting deals at their nearest store or flights from their nearest airport
Along with delivering customised messaging, DCO allows brands to efficiently test multiple versions of creative with minimal effort ensuring the campaign is optimised towards the best performing combination.
Deduplicated Media Metrics
Deduplication refers to the process of attributing a sale or action to any one partner. Most commonly attribution is based on a last-click or impression model where a brand attributes a conversion to the very last media channel. However, the last-click model provides a narrow view of the path to purchase and doesn’t take into account the numerous touchpoints a consumer can interact with before making a conversion and can often over emphasize the role of search. To solve this, advances in attribution modelling enable you to quantify the influence that each channel has directly or indirectly contributed towards a conversion. This insight enables brands to build out a more holistic view of campaign performance and make more meaningful optimisation and planning decisions according to the role each channel plays.
DEMAND-SIDE PLATFORM (DSP)
A DSP helps buyers to purchase ad placements efficiently in real time. DSPs can be used to purchase any type of digital ad format such as display, mobile, video and search ads. It enables buyers to reach relevant audience with wide range targeting capabilities and bid in automated auctions at the right price.
DSPs connect to multiple ad exchanges, enabling buyers to access multiple sites made available by publishers through the supply-side platform (SSP). DSPs help buyers to manage multiple digital campaigns in a single interface.
A floor price is provided by the publisher to protect the monetary value of the inventory by setting a minimum amount that it will accept for the sale of an impression to the exchanges or SSP, where an auction may occur.
If a DSP’s bidder places a bid below the floor price the exchange may reject the bid. Floor prices are established by publishers as a means to monetise their inventory from an auction mechanism. Bids below the floor price are discarded. A floor price is set to gather information or bids on what could be considered an opportunity by the publisher when the bid is slightly below the floor.
A DSP’s (or any buying system’s) bidder has to provide a bid to the exchange (auction marketplace) that offers the impression to the DSP for buying and bidding. The bid price is the value in dollars and cents that the bidder places on the impression and this is expressed as a cost per thousand impressions (CPM) value. The bidder changes the bid price based on various factors attached to an impression such as the budget or time remaining in a campaign, user or audience information, time of day, geographical location of the user and campaign KPIs.
A bid that is considered to have won the auction is called a winning bid. All other bids are considered lost. An auction win and loss is a key piece of information a DSP captures in it’s granular logs that help in improving future bid calculations and setting.
The auction type provides information to the bidder about the auction the bidder is participating in. For example, in OpenRTB 3.0 standard, a standard available to all companies writing bidder software so they can follow a common method of participating in real time auctions, auction type 1 refers to first-price auction and auction type 2 refers to second-price auction. As there may be other auction types available, the exchange or marketplace providing the impression can clarify the auction type value to the DSP. The auction type being available as part of the auction mechanism helps the bidder software to decide on what to value the impression at while accounting for the differences in mechanics between each type of auction.
The DSP’s bidder receives the site or app data as part of various other pieces of information in the bid request, and may be in the form of a URL. The domain or app information is vital to buyers for targeting as well as reporting purposes. Buyers use a domain blacklist to avoid bidding on unwanted domains that may have been blacklisted due to reasons such as or malicious intent and spoofing.
A digital advertiser is a person, team or company who wants buy an online advertising space. An advertiser is often referred to as a media buyer and uses a DSP to purchase digital ad placements in an automated fashion.
SUPPLY-SIDE PLATFORM (SSP)
An SSP is used by digital publishers to automate the selling of their ad inventory. SSPs enable publishers to connect their inventory to multiple demand sources, which can increase advertising yields and sell-through rate – the percentage of impressions sold by a publisher. SSPs allow publishers to control the inventory that is made available to buyers, along with the auction type and minimum rates at which the inventory may be accessed.
Creative is a set of ads and that can come in many forms – an image, animated image or text. In digital advertising, creative typically comes in a form of banners, videos or interactive rich media. Buyers are required to upload the creative and url of the landing page, where buyers would like their audience to be directed to after they click or perform an action on the creative, in the DSP before they can run a campaign.
The bid price is the price a buyer is willing to pay for the desired ad inventory. Buyers bid using CPM to win the auctions they are participating in.
The two common auction types are first-price auction and second-price auction. In a first-price auction, the highest bidder who wins the auction pays the exact price they bid. This auction type maximises the revenue for the digital seller. On the other hand, in a second-price auction, the highest bidder who wins the auction pays $ 0.01 higher than the second highest bid.
DATA MANAGEMENT PLATFORM (DMP)
A DMP is a data repository that helps you define, build, and activate high value audience profiles across your preferred multi-channel digital marketing ecosystem. It has the ability to provide a complete view of your audience by combining all of your data sources (1st, 2nd and 3rd party) in one place. This allows for continuous discovery and organization of new, valuable segments for smarter targeting and personalization.
Site Data/ Analytics
Site analytics is a form of 1st party data which measures your audience’s interactions on your website. This includes digital browsing behaviour, environmental and temporal data, and conversion data. This data is then captured and sorted by your DMP and can be subsequently leveraged on to reach your audiences or provide customized user experiences through your preferred multi-channel digital marketing ecosystem.
Audience sources are the locations in which data is collected to enrich audience segments. Generally, data sources will fall into either offline or online and 1st, 2nd and 3rd party data sources.
- 1st party data: an advertiser’s own customer data – e.g. data from the website, loyalty programmes or customer relationship management (CRM) systems.
- 2nd party data: obtained when an advertiser and another party agree to share data.
- 3rd party data: acquired from data providers who aggregate data from various sources. The various data sources contain traits and customer data that are then aggregated and organized into audience segments that can be used for targeting, optimization and reporting. As more data and traits become available, the segments are enriched with a deeper profile understanding.
Audience attributes are key identifiers that define audience profiles which make up targetable audience segments. These identifiers can come in the form of demographic, income, gender, profession and education. These attributes can be collected as 1st party data or purchased through 2nd and 3rd party data providers.
Offline data is information that originates from offline sources and is used for digital marketing. Offline data can come in the form of merchant data from CRM datafiles or purchased data. As this offline data is converted to useable online data, it can be mixed with online behavioral and contextual data.
AUTHORS & CONTRIBUTORS:
- Agnesia Ekayuanita, Programmatic Manager Asia, BBC
- Daniel Henriksen, Head of Outcome Media Planning, APAC, Xaxis
- Ganga Chirravuri, Chief Technology Officer and Global Head, Platform Solutions, CtrlShift
- James Rogers, Managing Director, APAC, S4M
- Kenneth Chow, Group Director, Adobe Advertising Cloud DSP, SEA, Adobe