A programmatic ad’s day lasts only 200 milliseconds, yet it packs a remarkable amount into that time. Let’s take a look at the nuts and bolts of how an ad is served

In the early ’90s, at the dawn of the digital advertising era, the first online ads were produced, sold and delivered in much the same way as traditional media such as TV, radio and print - manually. The process literally involved advertisers and publishers picking up the phone to do deals on digital ads, before uploading them to the relevant sites. 

It quickly became obvious the process could be dramatically more efficient if it was automated. In the mid-90s, ad servers and ad networks started to deliver on this promise, but it wasn’t until the mid-’00s and the arrival of SSPs and DPSs that programmatic, real-time bidding (RTB) transformed the industry.

Today, RTB allows the dynamic buying and selling of digital ad space. Incredibly, the whole process - from a viewer opening a webpage, to an ad delivered to that space - takes less than 200 milliseconds. Here’s how programmatic works, in six steps:

The click: The process begins when anyone opens a webpage or an app, or starts streaming a TV show. For the purposes of this article, we’ll stick with a webpage as our example.

Bid requests: The publisher of the webpage (for example a news site or online retailer) has an ad server that is alerted to the arrival of someone on the page. It will then contact its Supply Side Platform (SSP). This manages the programmatic auction and connects to buyers, providing information about the ad unit and the opportunity available. This might include anything from the ad size to audience details. This information is collectively called a bid request, which is sent to various Demand Side Platforms (DSPs) where buyers are digitally loitering, hoping to place their ads.

Find the best placements: The DSP is designed to help advertisers and their agencies find the right ad placements for their campaigns. When the SSP bid request pops up, a starter gun is fired for those buyers looking at the publisher's proposition. This is all automated at mind-boggling speeds - DPSs use advanced machine learning algorithms to work out which advertisers are best placed to bid for the webpage in the context of their pre-decided campaign goals.

Auction time: At the critical moment, the SSP analyses the bids it has received from DSPs and runs an auction to determine who wins the right to display their campaign on the webpage’s ad space. Bid price is a consideration in deciding the auction’s winner, but so are factors like audience match. Either way, the goal is to maximise revenue for the webpage’s publisher, while also providing value for the advertiser.

Winner decided: Once the SSP has decided which bid to accept, the winning DSP sends the advertiser’s creative through the SSP to the publisher’s ad server. This then presents the advert to the webpage’s viewer, and the process is completed, in around 200 milliseconds. 

Analytics and optimisation: That’s not the end of the story, though, because tracking pixels integrated into an advert’s creative can give feedback to the DSP as to how the campaign is performing. These pixels can register a user click, or acknowledge a consumer completing a desired action, like a purchase, and pass this information back to the advertiser. This allows marketers a constant, near real-time ability to monitor an ad campaign, understand its performance, and optimise strategy for the future.

Technological advances and innovations have created a fearsome ecosystem for advertisers looking to place their adverts across various online environments, channels and ecosystems. In a fraction of a second, digital ads are auctioned, displayed and analysed, all using machine learning and automation. 

For more insights about the digital advertising industry, be sure to explore Adtech Juice University.