Today it seems impossible to run ad campaigns working alone as publisher-advertiser relationships are more complicated than they used to be 10 years ago. However, fast-paced online advertising technologies are here to help us drive efficient ad campaigns. Today we are going to dwell upon concepts of ad publisher and advertiser discussing the field of their activity and the way they interact with each other. What is the place of each in digital advertising, let’s inspect it!
What is an ad publisher?
An advertising publisher is an affiliate, reseller, of digital inventory (website, app, or another medium). The main task of the ad publisher is to advertise and sell the advertiser's product by attracting active and high-quality users. Publisher marketing strategy directly influences the success of the advertiser. Why? Because it helps to generate high-quality traffic which is highly converting for the advertiser. This way, advertising publishers help brands to find the right audiences for their products or services.
When a publisher is also an advertiser. At the same time, you can also find a publisher advertising their own app. In this case, the publishers also act as advertisers - they have apps (as publishers) but they also start ad campaigns (as advertisers) in order to promote their products (apps) and drive more installations.
When a publisher is a re-seller. Sometimes media-sellers are not publishers themselves but third parties who re-sell digital inventory of publishers. In this case, they are called re-sellers or sub-publishers.
How do publishers offer their inventory for the ad placements to advertisers? With manual placements, the brand representative typically finds the publisher, negotiates the pricing and volumes, and waits for the advertising to appear on the sites.
However, today publishers are able to monetize inventory thanks to effective ad formats and ad monetization solutions. Programmatic is a model that helps to automate transactions fully avoiding manual manipulations, price discussions, or signing contracts. Automation improves efficiency by reducing costs and improving the quality of ad campaigns. How it is done we will discuss further in the article.
What is the publisher’s KPI? eCPM is the main metric used by publishers to determine the effectiveness of monetization. The higher it is the better are the outcomes for the publishers.
For instance, during the one ad campaign, the advertiser pays 10 dollars for 2 000 impressions. During the other $12 for 3 000 impressions. In this case, the publisher makes total revenue of $22 per 5 000 impressions. The eCPM calculation here: ($22/ 5 000) x 1 000 = $4,4. To dig deeper into the subject, read more in the article ‘what is eCMP and how to calculate it?’.
What is an advertiser?
Right after ad publishers, another link appears - media buyers (advertising agencies, advertisers, or brands). Advertisers rely on publisher advertisement to sell the product.
At some point, It was no longer enough for advertisers to purchase ad placements manually. They wanted to get to the audience that was looking exactly for their product. Here’s when ad networks and programmatic demand-side popped in. These platforms were able to determine the target audience, target according to interests and demographic characteristics of users. Publisher ads became more personalized.
On the supply side, SSP platforms have appeared. They allowed publishers to set the conditions for the inventory sale - the minimal price per impression, ad format, size, etc. With SSPs, ad publishers got the opportunity to monetize sites and apps automatically. Advertising publisher this way got access to the vast pool of advertisers globally.
How do advertisers pay for ad inventory? Digital advertisers can buy inventory based on various payment models, among which the most popular are cost per mille (cost per thousand impressions) and cost per click. In the cost per thousand impressions CPM model, the advertiser pays for 1000 impressions served at different apps/sites. The CPM model is considered to be the most popular among advertisers who serve branding campaigns. CPM campaigns can be very beneficial for brands that strive to gain good brand awareness (especially suitable for promoting new products and services). The CPM model is typically more affordable than CPC since advertisers pay only for impressions, not user clicks.
At the same time, it can still be beneficial for performance campaigns, especially when advertising offers are catchy. Just for a brief comparison - let’s say an advertiser pays 10 dollars for 50 clicks. It means the campaign will stop as soon as users click 50 times on the ad as the campaign purpose will be achieved. When an advertiser pays 10 dollars for 1000 impressions theoretically they can generate up to 1000 clicks. The more appealing the ad will seem to the user the more clicks it can generate as a result.
Difference between ad publisher and advertiser and their working platforms
So basically, we’ve discovered that the difference between publishers and advertisers is in their main function - the publisher monetizes inventory by selling placements for ads and the advertiser buys the inventory for ads.
Ad publishers and advertisers offer their inventory at SSPs, DSPs, and Ad Networks.
SSP (Sell Side Platform) has a range of optimization tools enabling publishers to conduct trades with a greater value for their inventory. So, what is a supply-side platform, and how does it serve publishers? On SSP the publisher sets the price floor and the requirements regarding the future ad campaign: ad types, resolutions, and formats that can be served at their inventory.
DSPs in turn, represent the interests of advertisers. So, what is a demand-side platform? The main purpose of DSP platforms is to buy an impression for the right target user at the lowest price. On DSPs, advertisers can buy inventory via RTB auctions as well as through direct deals, bypassing the auction.
RTB. What is real-time bidding? RTB is an advertising technology that allows organizing an auction between sellers and buyers of advertising in real-time. The purpose of RTB is to organize real-time bidding and automate the process of media trading between publishers and advertisers. The main benefit of it is that with such automation publishers don’t worry about remnants. There’s always a chance to find the buyer for a particular inventory at the auction. Still, those sellers who have unique inventory often prefer to sell it to the buyers directly via programmatic direct (without RTB auction). This deal type is also beneficial as both advertisers and publishers know for sure where they place ads/who buys ads and at what price.
Ad networks and ad exchanges. Advertising exchange is a part of the vast programmatic ecosystem where advertisers and publishers can meet and trade directly (without registering at SSPs and DSP). An ad exchange is also responsible for maintaining real-time bidding auctions when DSPs are bidding on a particular impression. Meanwhile, an ad server is in charge of storing ad creatives and delivering them to the viewers. Ad networks are pretty similar to ad exchanges in their functions. At the same time, ad networks and ad exchanges have minor differences.
How it all works together?
Targeting and ad serving. When users browse sites, enter searches, download files, or make purchases, they leave digital footprints. The user here means a unique cookie-identifier, not a first name, last name, and passport data so that privacy is still respected. During the process of bidding on ad impressions, the DSP thoroughly analyzes such data about the user containing in the requests that come from SSPs. In case the characteristics of the user and the campaign criteria match, DSP offers a bid and takes part in the auction. The highest bidder wins the auction and the impression is then served to that particular user. This makes the process more simple, faster, and highly efficient. The costs are lowering while the quality of the ad campaign increases. The advantages are obvious, but still, let us highlight what it brings to the advertisers and publishers.
The benefits of programmatic for publishers and advertisers
- Flexible and accurate targeting. The accurate and flexible targeting is achieved through analyzing demographic data, zoning by IP address, keywords, and other available parameters. This way advertisers address the right audience. Meanwhile, the ads get relevant and don’t chase away visitors from the publisher’s website.
- Easier to buy and sell. Programmatic connects to the vast pool of global supply and demand. The programmatic platform connects advertisers to publishers and publishers to advertisers automatically. There’s no need to do anything manually (except for campaign setting/setting parameters for monetization).
- Variety of formats. Even though programmatic is most often associated with banner display ads, other formats are also available for advertisers. Video, audio, native formats for mobile and desktop are among those formats that generate the greatest share of ad spending. Publishers can also decide which formats they want to serve on their inventory (using SSP settings).
- Saving money and time. Although the CPM for different ad campaigns may vary (depending on geo and other conditions) running automated campaigns on self-serve DSPs is much cheaper than commissioning it to the agency. Publishers also save time as they don’t have to search for advertisers (and vice versa), negotiate prices, etc.
- Accountability and measurability. Both advertisers and publishers can evaluate the effectiveness of the advertising campaign/monetization inside of the programmatic platform they use (using reporting feature).
The last word
Online advertising isn’t a tricky thing when you try to understand what each party is responsible for. The primary function of ad publishers is to sell their inventory and the purpose of advertisers is to buy it. Nowadays ad placement and inventory monetization can be organized in a countless number of ways. However, exactly programmatic enables publishers and advertisers to automate the process and significantly optimize it as a result. With programmatic advertising platforms like SmartyAds, SSP publishers magnify the results from monetization by choosing suitable floor prices, ad formats, resolutions, and other important characteristics that make ad serving on their inventory seamless and profitable.
SmartyAds SSP brings power back to publishers. Monetize how you want with SmartyAds SSP.
Irina Kovalenko, CMO of SmartyAds