In general, there are many ways to buy ads online today, which makes the digital advertising ecosystem very complex.

For the purposes of this course, when we talk about this ecosystem, we will discuss it in terms of Walled Gardens and the Open Internet. Starting with Walled Gardens, these are media companies that require advertisers to run campaigns on their proprietary media-buying platforms. For example, if an advertiser wants to run ads on Snapchat, they must buy directly from Snapchat.

The same goes for all the major platforms like Facebook, Twitter, Pinterest, Amazon, and Google, to name a few. While buying across these different platforms can sometimes be done through API integrations, it can be complicated and limiting. Because of this supply chain, it also means that when advertisers run on those platforms, their campaigns can be isolated, potentially missing users they are looking for outside of those platforms.

The best way to run a strategic, multichannel campaign is by running programmatic campaigns that complement your efforts within Walled Gardens. This brings us to the Open Internet. The Open Internet is where programmatic lives and breathes.

The general concept of targeting and ad creation is similar, but the execution is much broader. Instead of facilitating a purchase directly on a social platform and only on the network they offer, programmatic buys are facilitated through demand-side platforms (DSPs), and inventory is available from a vast number of sites and apps. Now that we’re on the topic of the Open Internet, let’s look at the programmatic ecosystem and see how it all interacts.

Simply put, the programmatic ecosystem is divided into the buy-side and the sell-side. First, the buy-side. Here we have advertisers, agency trading desks or in-house teams, ad networks for buyers, ad servers, and, of course, demand-side platforms and DMPs.

Essentially, and simply put, advertisers are looking to buy ad inventory. To do so, they use a DSP to bid on available ad space from a wide variety of publishers in real-time. In this buying process, the DSP works with a data management platform, or DMP, to collect, organize, and activate first-, second-, and third-party audience data, enabling data-driven marketing for advertisers running campaigns.

Now, on the other side of the coin, we have the sell-side. Here we have the audience, publishers, ad networks, publisher ad servers, and supply-side platforms. Essentially, what’s happening here is that publishers, or website owners, work with a supply-side platform, or SSP, to facilitate the sale of ad inventory on their sites. The SSP then takes the details of the available ad impression and the visitor’s audience data to offer the available impression to the DSP.

So, when an advertiser tries to bid on an available impression, the DSP and SSP will handle this auction. With that said, we’re just scratching the surface here, and we’ll go into more detail on each of these definitions later in the course. Now, in case you’re still unsure of what’s happening, let’s paint a very simple picture of what occurs on the Open Internet.

Imagine a website or app you visit is an art gallery. In that art gallery, there are all types of pictures that can change dynamically based on what you’re interested in at that moment. This represents the ad slots that exist on publisher sites.

So, once you enter that art gallery, all these pictures are optimized to show you the types of artwork that will engage you and perhaps make you want to explore further. In the real-world example of a website or app, this is what’s happening billions of times a day. A user visits an online destination, a publisher has their inventory ready to sell through an SSP, and an advertiser bids on that impression through a DSP.

And just like that, an ad, or multiple ads, are shown. So, in a more practical sense, think of what’s happening programmatically in six steps:

• Step 1. A user visits a website or mobile app.
• Step 2. The ad space owner recognizes a visitor and offers the available impression for sale through an SSP.
• Step 3. Advertisers bid on the impression through a DSP.
• Step 4. The highest bidder wins the ad impression.
• Step 5. The ad is served in its designated position.
• Step 6. The user sees and interacts with the ad.

With that in mind, and to help you understand this better, let’s look at the different types of ads you may have seen or interacted with in a programmatic environment.