March 18, 2022
4 min read
In the past, digital ads were traded between publishers and advertisers by e-mail. In time, with the growth of digital advertising volume and the rising number of advertisers and publishers, the traditional method became more complex and difficult to sustain with manpower. Consequently, the ‘programmatic advertising’ term has entered into our lives. It is important to emphasize that programmatic advertising, which allows faster, more efficient, and safer ad trading, has made a big difference in a short time.
Online ad trading uses some parts of advertising technology (AdTech) to create better abilities. It manages the dynamic process transparently, quickly, and accurately because it’s supported by algorithms and softwares. Automated auctions help to minimize error rate and time loss. Programmatic advertising gathers data through user’s browsers ( e.g cookies, IP, pixel tags), analysis every piece of information, including behaviors and preferences. It provides targeting options for SSP-DSP sides along with highly relevant ad viewing experiences for visitors, it also creates ample opportunities for brands such as reaching potential customers, increasing interaction rates, developing the marketing strategy, and brand awareness. Thanks to these features, the market share of programmatic advertising has reached remarkable levels in the digital world.
It takes place between publishers with the available ad space and the advertisers or ad networks who want to buy online ad space. The platform brings together a variety of potential advertisers and publishers. The primary goal is providing a perfect match environment for efficiency. In short, it consists of SSP (Supply-Side Platforms), Ad Exchange, and DSP (Demand-Side Platforms) components.
Essentially, preferred deals are based on direct agreements between advertisers and publishers. A publisher can give a priority to advertisers for looking at inventory first. Generally, CPM is higher than auction models because publishers prefer to offer premium inventory. As a non-guaranteed based model, advertisers can bid optionally. While the advertiser has exclusive first-look access, the inventory can not be reserved. Also, there is no obligation to purchase the inventory.
In practice, both advertisers and publishers can initiate negotiation. The terms, inventory details(Price, inventory, ad sizes, audience, etc.), campaign requirements are discussed and the offer is created. The agreement is prepared by the publisher. Advertisers review the offer, the deal is initiated, and a Deal ID is sent to the advertiser. When a request is sent by the publisher for the inventory, the advertiser evaluates the request and decides whether to bid. If no buyers consider offering, inventory goes directly to other auction models.
Evaluating the inventory with a preferred deal instead of an auction model brings many advantages for publishers and advertisers.
In both models, certain advertisers have priority access to inventory, this situation can lead to confusion between the two models.
Preferred deals are direct agreements between advertisers and publishers. Negotiating a fixed price provides several advantages for both publishers and advertisers. However, it is a non-guaranteed approach, at this point, advertiser and publisher sides may also make agreements with different advertisers or publishers, depending on the target strategy and budget.
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