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Media Buying 101: Ad Networks & Ad Exchanges

This is the second article in an exclusive series that explores the complex world of Programmatic Media Buying. If you’d like to suggest a topic, please email us.

Media Buying 101: Ad Networks and Ad Exchanges

In the first installment of this series, you got a quick primer on Programmatic Media Buying. We talked briefly about how programmatic, ideally, makes our lives as media buyers easier.

But the evolution of the ad buying process towards programmatic through the years involves a multi-faceted ecosystem of exchanges, servers, data suppliers, and so much more. Together, all these technological cogs come together to make up the complex programmatic machine (and now-a-days, they can also come in one convenient platform).

Let’s take a step back and talk about this evolution, beginning with Ad Networks and Ad Exchanges. What’s the difference? How and why did they first develop and how have their roles changed in today’s programmatic ecosystem?

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Media Buying 101: What Is Programmatic Buying?

This is the first article in an exclusive series that explores the complex world of Programmatic Media Buying. If you’d like to suggest a topic, please email us.

An Introduction to Programmatic Buying

I’m sure you hear this word thrown around quite a bit. Programmatic Media Buying – it’s ‘the future of online advertising’ – a means to completely remove all manual processes in digital advertising.

It’s an important buzzword that many people know of and use. But let’s be honest, there’s a lot of confusion surrounding this term and few actually know what it means.

Programmatic In a Nutshell

In short, programmatic media or ad buying is the use of technology to automate and optimize the ad buying process in real-time.

A simplified example of programmatic is the use of ad networks like AdWords, which is powered by algorithms, to serve highly targeted ads at viewers.

But programmatic has evolved to be much more complex than this. Once exclusive to search and display ads, programmatic now includes many more mediums, like video, and can be done across multiple channels (desktop and mobile).

Generally, it is a catch-all term that encompasses the leveraging of big data and technology including ad networks, ad exchanges, trading desks, demand-side platforms (DSPs), supply-side platforms (SSPs), exchange-based buying of ad inventory, real-time bidding (RTB), and ad networks to serve targeted and relevant experiences to consumers across channels. On the back end of things, algorithms filter ad impressions derived from consumer behavioral data, which allows advertisers to define budgets, goals, attribution, and optimize for reduced risk while increasing ROI with ease.

That’s a lot of jargon. Confused? Me too.

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Before we even begin to understand the many intricacies of programmatic media buying, we need to know why it came into demand, and define the many elements that programmatic encompasses.

So let’s break this down, and take it one step at a time.

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