What Is the MarTech (Marketing Technology) Industry and How Does It Simplify Media Trading?

What Is the MarTech (Marketing Technology) Industry and How Does It Simplify Media Trading?

Long gone were the days where a marketer will conduct research and campaigns manually. The current marketing industry relies primarily on technology. These tools, known as MarTech, simplify most marketing activities, including media trading. In this post, we’ll explore what is MarTech and how it makes media trading a breeze.

What Is MarTech (or Marketing Technology)?

MarTech is an umbrella term for the group of software tools marketers use to plan, execute, and measure marketing campaigns. These tools are used to simplify marketing processes through automation. They collect and analyze data, streamline campaign management and engagement with your target audience. The group of tools the company uses for marketing activities is called a MarTech Stack.

Why is Marketing Technology Important?

Modern marketing wouldn’t be possible without marketing technology.Every time you use an email platform to distribute an email campaign or analyze your website analytics, you are using MarTech. Here are some reasons why MarTech is important:

MarTech integrates marketing and operations

Marketing technology fosters collaboration between the marketing and operations departments. MarTech tools, teams get real-time data to make data-driven decisions.

MarTech enables you to assess the entire customer journey

When you integrate MarTech you get to look at the customer data from the first visit to the purchase. MarTech enables you to answer questions about your customer like:

  • How do they find you? What was their first interaction with your brand?
  • Which of your channels convert better?
  • How can you improve your marketing strategy and help your customers convert?.

MarTech helps you market smarter

When you use MarTech tools, you can automate efficiency, streamline data and processes. As a result, leveraging technology enables you to market faster and smarter.

What Is MarTech Used for?

The combination of digital tools you use to optimize your work is called the MarTech stack. It addresses most marketing activities and several use cases such as:

Data and analytics solutions

Marketers collect statistical data, analyze it and use it to determine trends and actions.

The marketing technology helps marketers to plan, and run marketing campaigns. Digital analytics software helps marketers analyze consumer behavior by gathering and understanding data. They also allow marketers to measure and understand the performance of the campaigns.

What type of solution do you use for this use case? Digital analytics software (think Google Analytics)

Commerce and sales

Another part of the marketing stack is sales automation solutions. These technologies include the automation of the sales process from lead acquisition to purchase. MarTech tools enable collaboration among marketing, sales, distribution, and logistics, across the supply chain. By doing this, MarTech tools then help bridge the gap between marketing and sales, driving lead generation, and improving customer experience.

Solutions you may use for this case: CRM software, sales software (for example, Salesforce, Shopify)

Content and experience

Marketing tools can help companies manage their content efficiently and create a holistic experience for the customers. Content and experience tools that help marketers even build a website so they can manage their web presence and deliver engaging and informative content. Other tools help with search engine optimization, search marketing, or social media.

Customer relations

Customer relations implies strategies and practices which manage the relationships and interactions with customers across their journey. These solutions help automate repetitive tasks, increasing efficiency and giving a personalized experience to customers.

Marketing management

There are marketing solutions too to manage marketing talent, collaborations, and product management.

MarTech Best Practices

As the organization’s digital marketing needs grow, the solutions also multiply. As a result, marketers often struggle to find the right tool from thousands of different platforms. The growth of the Internet made the number of digital marketing solutions explode exponentially..

While in 2011, the number of companies was around 150, now this number surpasses the 5000.

Source

With such a dynamic environment, marketers cannot afford to make mistakes. Therefore, to gain the best ROI from the marketing stack, here is a list of best practices:

  • Audit your existing stack

Before adding new technology, check what solutions you already have. If you don’t, you risk overlooking errors and ending with several solutions that don’t talk to each other. By doing this, it will help you assess the capabilities of your stack and prevent issues.

  • Ensure the new marketing technology integrates with your existing solutions

Once you choose a solution candidate, consider how the new technology will integrate with your existing stack. Lack of integration is one of the most common issues mentioned by marketers. The new solution needs to align with your business and marketing goals, support your use cases and business needs.

  • When outsourcing, choose a company that takes charge of the implementation

If you choose to buy the tool and implement it by yourself, make sure your team knows the fine details of implementing and running the tool. Otherwise, you can outsource the technology. In this case, ensure the vendor will take care of the setup and training.

  • Monitor marketing metrics

Monitoring and tracking metrics such as open rate, conversion rate, and such, can be time-consuming if done manually. Moreover, you risk missing the mark. Choose a solution that automatically tracks and measures your metrics and offers recommendations on how to improve your campaign for best results.

  • Leverage automation

To make the most of your MarTech, you should use it to automate your marketing system as much as possible. Automation helps you streamline your system, create more leads in less time, analyze customer data, and overall work faster and more effectively.

  • Don’t tamper with your marketing strategy

With the many tools available for your stack you will surely get a lot of recommendations to improve your strategy. However, don’t be tempted to change your entire strategy at once. This might create more problems than solutions. Build your MarTech stack around your sales and business goals and not the other way.

  • Leverage your data

Accurate data is like gold for marketers. To benefit from your data, the data center should have not only a lot of available data, but you should use the right tools that help you make sense of it. Keep in mind to segment your data and label your customers so you can maintain the data integrity and simplify accessing it.

Difference Between AdTech and MarTech

There is confusion among business owners and even marketers between AdTech (advertising technology) and MarTech (marketing technology). Although closely related, these technologies perform different functions. Let’s understand the difference between them.

What is AdTech?

AdTech is a group of technologies that simplify ad buying and selling programmatically. These solutions cover all the demand-side platforms, the supply-side platforms, and ad exchanges.

AdTech makes it possible for companies to target specific audiences and optimize their advertising spending.

Source

Ad technology is encouraging companies to leverage more digital advertising. As a result, ad spending has increased steadily, despite the pandemic impact, and is expected to reach $220.93 billion in 2022.

The full guide about what is AdTech

Difference in Platforms

First, the platforms used for online marketing and digital advertising are different. Most platforms are unique to each field. For example, advertisers use demand-side-platforms while a marketing agency will usually use an email automating tool.

Difference in Function

Ad tech is based on a working campaign. The advertisements and the measured metrics are designed to possibly create, execute and manage digital advertising campaigns. Ad tech makes it easy for publishers like app and website owners to sell their ad inventory available.

MarTech encompasses AdTech, and it includes also creating a sales funnel, nurturing leads, and testing campaigns.

AdTech Platforms and Tools

These platforms are used by the ad tech industry:

  • Demand-side platform

A demand-side platform is a software solution that allows media buyers buy inventory in ad exchanges and supply-side platforms. DSPs implement real-time bidding so advertisers buy media per the impression.

  • Supply-side platform

An SSP is the supplier-side version of a demand-side platform. It automates the offering of the inventory on an ad exchange. The technologies used in an SSP enable publishers to maximize their yield by getting the highest possible price for their inventory.

  • Ad network

An ad network usually buys inventory from suppliers and ad exchanges and sells them to advertisers. Learn more about ad networks and which are the best for publishers in our article 11 Best Ad Networks for Publishers in 2021.

  • Ad exchange

An ad exchange is a tech-powered marketplace that simplifies buying and selling ad space and impressions between suppliers and advertisers. The exchange manages the buying and selling process automatically via programmatic real-time bidding.

  • Ad server

An ad server is a software that determines which ads will be displayed on a digital property. This software serves the ad to the user according to the specifications set by the advertiser on the ad network or ad exchange. It also collects data about the ad’s performance, like clicks and impressions.

  • Search engine marketing platforms (SEM)

These platforms use programmatic paid advertising to promote a website on search engines. To achieve that, they connect to ad networks and exchanges.

The MarTech Stack

There are essential technologies both for B2B and B2C marketers:

  • Content management system: the software that helps you power your website, blog, or any other content where the marketers try to engage your potential audience.
  • AdTech platform: your AdTech stack should be part of your marketing stack. Consider signing up for an advertising network or monetization platform. Combine different types of display ads, retargeting, and ad tracking software.
  • Email marketing software: email is one of the most effective marketing channels and you need to have it in your toolkit if you want to engage and nurture your customers. Email marketing is sometimes part of inbound marketing solutions.
  • Analytics software: not only website analytics but business analytics capabilities should be included in your stack. In large companies, it could be necessary to leverage data warehouses or content intelligence solutions to understand your data in large companies.
  • Experiential marketing and optimization: event marketing is gaining momentum with the growth of virtual events. To make the most of experiential marketing, there are event management tools to add to your stack.
  • Social media management: who isn’t on social media these days? Ensuring your posts and content gets published on time, monitoring social activity, and increasing social engagement will depend in part on having the right tools.
  • Search engine optimization: great SEO can increase your brand exposure in search engines and drive organic traffic to your website. There are many solutions available to help with keyword research and other SEO-related initiatives activities.
  • Customer relationship management: Lastly, but not less important, the right sales and CRM solution can help you track the results of your marketing efforts.

How MarTech Simplifies Media Trading

Without MarTech, modern digital marketing and advertising wouldn’t be possible. The different solutions that comprise the MarTech stack help businesses streamline their marketing processes, among them, media trading.

What is media trading? It is the buying of ad space in real-time through an automated process (real-time bidding). Advertisers use programmatic tools to buy from publishers that make their inventory available on ad exchanges. Media traders are the people in charge of optimizing this process.

MarTech and AdTech tools help publishers maximize their yield and match advertisers’ demands. There is no need to be contacting advertisers directly to sell inventory because the tool takes care of everything in a matter of seconds.

Conclusion

It is without a doubt that the MarTech industry has revolutionized the way marketers and advertising agencies work. Leveraging MarTech tools like CodeFuel can simplify the process even more. By offering a complete monetization platform, you have an all-in-one solution to monetize your digital properties.

What is Media Mix Modeling(MMM) and How to Measure it?

What is Media Mix Modeling(MMM) and How to Measure it?

The saying goes that you cannot manage what you cannot measure. When it comes to choosing the right media mix to achieve your marketing efforts, how do you know what is working and what isn’t? Media mix modeling is a group of technologies and practices geared to identify the impact (in money and results) of your marketing efforts on your ROI. In this guide, we prepared all that you need to know about media mix modeling to start optimizing your campaigns.

Short on time? Here’s the table of contents:

What Is the Media Mix in Marketing?

Media mix is the combination of all communication channels an organization uses to get its brand message and marketing efforts across to potential customers. The media mix may combine traditional advertising channels, like print, broadcast and TV, social media, and online advertising. Companies talk about the marketing mix when planning their campaign goals and it is an essential part of their marketing strategy.

What Is Media Mix Optimization?

Organizations optimize their media mix in order to gain insights into what they need to target their audience effectively. Not all companies can optimize their media mix because it is more suitable for online marketing. It requires looking into the analytics and ROI of different marketing strategies.

This is where media mix modeling comes to help.

What is a Media Mix Modeling study?

Is a marketing analysis technique that measures what is the impact of a campaign and determines how each part of the marketing mix contributes (or not) to its success. The results of a media mix modeling study can give you insights that you can use to improve a campaign.  Let’s summarize this with a definition:

Media Mix Modeling is a top-down approach that uses tools and advanced analytics to evaluate how media and marketing activities, pricing, seasonality, and variable factors impact sales and ROI. It provides a measure of how activities contribute to the company’s ROI.

Marketing analysts use data science techniques such as multi-linear regression to determine the effectiveness of each marketing input in terms of ROI. The goal is to identify which marketing efforts have higher ROI and are thus more impactful.

Ad Effectiveness

MMM model example (Image source

How does MMM work?

Media mix modeling analyzes collected and processed data from the channels that form the marketing mix. Some solutions enable marketers to factor in traditional channels, promotions, seasonality, and other variables.

The modeling collects data from disparate sources, which then applies advanced statistical analysis to, and enables to get insights into how effective is the current campaign. MMM leverages metrics and variables like sales, ratings, or online analytics, allowing analysts to have a broader picture of the impact of the campaign in the marketplace in a measurable way.

MMM analyzes linear and non-linear variables. This means there are variables that a direct relationship with sales can measure. The more you increase the input, the more sales grow. But other variables, like broadcasting, are more difficult to track. If a marketer would do that manually, it would be extremely difficult. MMM technology enables marketers to use artificial intelligence and advanced analytics to find out a quantifiable impact of each marketing effort, regardless of the channel.

The goal of a media mix modeling study is to give a measure of the impact of each marketing activity on each channel. It works by quantifying the effect of advertising, pricing, PR, and sponsorships.

The term was coined in a paper by the Harvard Business Review, and the technique has been around for a few years. Thanks to the advance in statistical methods and artificial intelligence, media mix modeling can be done now in a simpler way.

The factors that may affect the marketing mix can be categorized as: 

Incremental drivers: this refers to business outcomes generated by marketing activities like print ads, digital spending, price discounts, social outreach.

Base drivers: this refers to outcomes achieved without any advertisements, usually due to brand equity. These outcomes usually don’t change unless there is an economic or environmental change.

Other drivers: related components of baseline factors, measured over a period of time.

Media mix modeling diagram

Example of a media mix modeling diagram (Image source)

How to Use Media Mix Modeling?

Media modeling gives marketers the opportunity to support their decisions with data, creating a data-driven approach that is more accurate and actually can save money and effort.

Research from a Forrester study, “The Current State of Marketing Measurement and Optimization”, shows that 71% of marketers are impaired by inefficient measurement methods and tools. Here is how to make the most of your media mix modeling:

1. Collect data at the personal level

At this moment, when third-party cookies are about to become a thing of the past, marketers everywhere are trying to collect the information they need. Personal level data allows you to have an accurate picture of how customers relate to the media mix you chose.

Person-level data means you assign data from sources to an individual consumer with the goal to answer business questions and pinpoint interactions at the user level. [CLICK TO TWEET]

In the Forester report mentioned above, 99% of marketers not currently using person-level data would like to use this approach today.  This granular approach allows you to conduct analysis at the user level instead of using the already aggregated data.

2. Check the type of data

Media modeling works better if you are working with digital channels than for traditional marketing methods. It is more difficult to measure the results of a newspaper ad or a radio broadcast. Achieving the right marketing mix, with a greater investment in online marketing channels (including mobile) can give you a more accurate picture. This is also consistent with trends towards online and mobile content consumption by users. By migrating campaigns to online channels, you can measure ROI more accurately and have better insights for decision-making.

3. Choose a platform that’s right for your organization

Using analytics software gives you an advantage. You can analyze the media mix by using platforms that collect user interaction data and provide tracking reports. The best approach is to choose a platform that gives you complete visibility of all the channels you are implementing. A software that can provide accurate and timely reports is also a must. You need to know how your channels are performing individually and as a part of your marketing campaign.

4. Analyze the data

Before getting into the analysis, you need to choose what metrics you want to measure for each channel. The wrong metrics can give you a completely different picture that is not akin to reality. Choose the metric you want to measure according to the goal you want from that channel or activity. For instance, email marketing newsletters can be measured by click-through rate more effectively than by measuring opening rates.

Once you chose the metrics and got the data, it is time to analyze and understand the reports. It is important to know what the data is telling you to use it to your advantage. Following the example of the email newsletters, if you see a high CTR from them, it is a sign that you should use this strategy for the next campaign for that audience.

Try to find the “high-performers” and the “low-performers” too. Knowing where your strengths and weaknesses in the campaign will help you adjust and improve it for next time.

5. Keep in mind social sentiment and brand perception

The success of a marketing campaign is not only measured in terms of conversions or clicks. Understanding how your potential audience perceives your brand can provide context and help you interpret the data better. Factor consumer opinion in your media mix model. How do you do it?

Conduct social media and search for sentiment analysis. Take note of what people are saying about your brand, the positive and the negative. You can use that information to create a survey and prove your findings by rating your company. Specifically, asking how likely they would recommend your business to a friend and what type of marketing content would they like to see more. This will give you an idea of where to focus your marketing efforts next.

How Do You Know The Media Mix is Right for Your Brand?

How do you determine the right media mix for your campaign? Let’s look at some of the factors you should consider when choosing your media mix.

Using multiple marketing channels to promote products and engage your users is a popular approach. However, randomly choosing as many channels as possible is not only ineffective but also can lose you a lot of money. Choosing the right mix is essential to achieve a successful campaign.

How do you start? By knowing and understanding your target audience. After all, your goal is to engage them. There are two key steps in choosing the right mix for your marketing strategy:

Define your target audience

This is the foremost step because without understanding your audience you are in the dark. Start by mapping basic demographic data: Location, gender, income, age, education level. Then you can further dig into finding interests, platforms they visit. How do you do it?

  • Check at your competitors: you can gain a lot of information about your potential customers by checking your competitor’s campaigns and social media sites.
  • Search in social media groups of interest: your customer talks about products related to yours on social media and review sites. Take a look at what they are saying, where they are located, and such.

You should know who the potential customers are for your product or service. A good rule of thumb is to create buyer personas to have a detailed idea of who is your ideal customer.

Collect and use reliable data

Gather data on your target audience according to what you know about your audience. For instance, organic research, competitor audits, sentiment analysis. Check data from media viewing research sites too to have a broad picture. The right data can provide the insight you need to choose the market mix that works.

Related content: What is Media Buying and the Best Templates to Download

Media mix modeling vs attribution modeling

Modern marketing is based on hard data, especially digital marketing. One of the questions prevalent in marketing departments is where the marketing budget goes. Attributing where the money was spent to lead generation and marketing goals is one of the key objectives of every marketer. Despite ongoing efforts and data-driven analysis, it is a challenge to attribute accurately. Marketers diverge if attribution modeling or media mix modeling is the best measurement model to use.  Let’s examine each one.

What is the Attribution Model?

Attribution Modeling is a bottom-up approach used for measuring marketing efficacy. This method analyses and identifies the value of each marketing initiative by looking at the actions users take before converting. 

Attribution modeling focuses on the outcomes of the marketing efforts as measurements, online sales, advertising, and similar conversion efforts.

There are five types of attribution models: 

  • Last interaction

Last interaction

This involves attributing the credit of the conversion to the last lead a user interacted with. This method is used by default in many marketing teams. For example, if a user finds your site by a Google Ad, but makes the purchase finally from a Twitter ad, the ad gets 100% credit for that sale. 

  • First Interaction

First Interaction

This involves assigning credit to the first introduction of the user to the business. In the above example, the Google ad would get credit instead of the Twitter ad. 

  • Last non-direct click

This model also attributes all credit to a single interaction. The basis of this approach is that the last action is triggered by the last non-direct click because it is when the user is exposed to your marketing efforts. 

  • Linear attribution

This model divides the attribution equally among all user interactions before conversion. That means ⅓ would go to the Google ad, ⅓ to your website, and ⅓ to the Twitter ad. The problem with this model is that it doesn’t account for the level of influence of each interaction. 

  • Time decay attribution

An evolution of the linear attribution model takes into account when each interaction takes place and gives more importance to the interactions that happen close to the time of purchase. This would give the Twitter ad more value than the other interactions. 

  • Position-based attribution

This model also splits the difference when allocating conversion credit. It gives 40% to the first interaction, 40% to the last, and 20% to divide among all the other interactions.

The difference with Media Mix Modeling

Media mix modeling uses a regression analysis evaluating the impact of multiple variables on a single variable like sales figures. It calculates the relationship between the independent variables and the dependent variable.

Attribution modeling could have worked in the past for simple marketing strategies with few channels. However, this proves difficult for the complex and distributed strategies of today’s marketing. Media Mix Modeling can account for a wide range of data from diverse sources.

Pros and Cons of conducting a MMM

Implementing a media mix modeling can be more effective:

  • There is enough data to estimate parameters in the model.
  • There is a range of variability in the advertising levels and control variables.
  • The model inputs vary independently.
  • The model accounts for the drivers that may impact ROI.
  • The model captures the relationship between variables.

There are challenges from issues that may affect the reliability of results from MMM.

So, what are the pros and cons of using marketing mix modeling?

Limitations of Marketing Mix Modeling

Marketers need to take into account several elements across their ecosystem, which may include:

  • Person-level, behavioral data
  • The impact brand authority has on the marketing spend
  • What are the key times to send marketing messages
  • What’s the proper attribution on individual media effectiveness

Taking into account all these metrics may have caused issues of the reliability of the media mix modeling. Marketing mix modeling technologies enable marketers to unify the measurement.

Advantages of Marketing Mix Modeling

While MMM cannot identify individual opportunities to optimize their campaign optimization. It gives the starting point for high-level marketing budget planning, providing a holistic approach to general market trends, giving marketers a full-circle view into their prospective markets.

Common myths about MMM

Like many analytic solutions has become very popular, but does it live up to all the hype? Here are a few misconceptions people have around media mix modeling: 

  • Media mix models are obscure: since there are datasets and advanced analytics involved in media mix modeling, these methods are considered lacking in transparency. This raises the question of how do you know if the model is accurate if you cannot see it all? The right approach is implementing a transparent approach, determining deliverables, outlines, milestones, and reports.
  • MMM doesn’t provide real-time data: the truth is that MMM is based on historical data. However, modern media mix models can provide near real-time marketing insights, that can evaluate new campaigns, and assess the effectiveness of a  running campaign.
  • Is biased to offline/online channels: media mix strategies may focus more on offline channels. But modern media mix models consider all channels, digital and offline. Media marketing models are adapted to take into account each channel and its importance as a factor.

How do you measure MMM?

Media mix modeling is measured by using regression analysis, specifically multi-linear regression. The model uses dependent and independent variables to identify a relation between them.

Analysts form an equation between the dependent and independent variables. Depending on the relation between the variables the equation can be linear or nonlinear. Here’s an example of an equation of multi-linear regression where each beta shows that an increase affects the total increase of sales.

Sales equation

Example of a sales equation (Image source)

MMM helps marketers in optimizing future spending and maximizing the effectiveness of the marketing campaign.

Media Mix Modeling Ratio

Besides complex equations, the MMM ratio consists of three key components:

  1. What marketing channels are you using?
  2. How much money are you spending on each channel?
  3. What were previous campaign results and insights?

The answer to these three questions may determine what is the rate of effectiveness of your marketing efforts.

Common use cases for using MMM

Media mix modeling or as is also known as marketing mix modeling can be used to measure and optimize your marketing channels in terms of ROI. Here are some use cases you can apply this technique to:

Budget setting and optimization: Large companies with geographically distributed campaigns across multiple media channels can benefit from the scalability of media mix modeling. Media mix modeling leverages automation to perform large-scale marketing effectiveness.

Media measurement: You can measure the impact of different types of media campaigns, paid, owned, and earned. You can use media mix modeling to measure the customer journey in its path to purchase. The insights you get can be used to optimize your spending and actions across those channels.

Measuring sales drivers: Marketing mix modeling can be used to find what are the factors driving sales, so you can invest more in the winning strategy.

The History of MMM

Marketers started to use Media (or Marketing) Mix Modeling in the golden age of advertising, around 1960-1970 when marketing was much simpler than today. One of the early users of media modeling was Kraft Foods when they launched Jell-O.

Traditional MMM allowed Kraft to see how sales would be affected according to different levels of advertisement and geographical location. For instance, how would sales increase by running campaigns in 10 cities instead of four?.

Nowadays, with the application of artificial intelligence data analysis to media mix modeling, analysts can get insights practically in real-time as campaigns are running.

What to look for in MMM tools

To implement an effective media mix modeling you need marketing performance tools that give you the insights you need. Here’s what you need to know when looking for a solution: 

  • Balancing long and short-term growth: most of your efforts should be focused on long-term growth but don’t overlook short-term goals. The Institute of Practitioners in Advertising suggests a ratio of 60/40 long and short-term marketing activities. Your marketing performance tool needs to analyze how both campaigns will grow your business.
  • Collects and measures data from disparate sources: this is one of the basic features of a marketing performance tool. To be effective at media mix modeling you need a tool that can collect, process, and analyze data from digital and traditional media. Since most of these data sources have their own analytics, you need an orchestration platform that can ingest the data from these sources and give you the insights you need.
  • Takes into account external variables: political, economical, and social changes can affect marketing efforts. A good tool needs to recognize disrupting variables and assess how they would impact your long-term campaigns.  
  • Consider the customer journey: a media mix modeling needs to account for the interactions along a customer journey. Your tools should be able to tell you what is the impact of each step, considering customer purchase patterns and predicting consumer trends.

FAQs About MMM

How do you do a market mix model?

Base variables or incremental variables are taken into account, quantifying them and breaking down business metrics to find out how marketing and promotion activities contribute to ROI.

What type of Modelling method is critical for marketing mix evaluation?

Marketing Mix analysis is typically done using linear regression. Other effects as non-linear and lagged are included to have a broader approach.

What is market mix Modelling?

Market Mix Modeling is a technique that helps to quantify several marketing inputs on sales or market share.

How CodeFuel optimizes media buying and management

Media buying is an essential part of media mix modeling. After all, the channels you use will determine how they will impact your marketing campaign. CodeFuel helps you maximize revenue per user visit and offers maximum flexibility for your media campaigns, on any platform. By delivering the right ads to the right buyers at the right time, your campaign is more effective. Start optimizing your marketing campaigns effectively with CodeFuel today. Sign up today.

What is Ad Tech Industry – And How it Makes Media Trading Easy

What is Ad Tech Industry – And How it Makes Media Trading Easy

The ad tech industry has changed significantly from a decade ago. Long gone are the days of negotiating ad placements between publishers and advertisers. Ad tech makes it possible for giants like Google and Facebook to make billions in revenue, and online publishers and developers generate income from their digital properties. But what is exactly ad tech and how it is shaping media trading?

Ad Tech brief definition

Is an umbrella term that stands for advertising technology. It refers to the stack of software and tools advertisers, agencies, publishers, and other industry actors use to plan and manage their advertising and monetization strategies

Evolution of the Ad Tech Industry

Evolution of the Ad Tech Industry

Before the advent of ad tech, media buying and advertising was a manual, complex process that required a lot of time and effort. Then, in the ’90s, e-commerce exploded, and advertising agencies found themselves helping to select websites for their client’s ads. This involved researching, checking metrics, and choosing which website would bring the maximum ROI for advertisers.

The first significant change came with the creation of the first ad server. A software that would automatically serve ads, ended manual ad placement and started the automated advertising revolution. This first ad server would later become the Google Ad Manager.

From then, the ball rolled quickly, and soon other technologies appeared driven by the market needs. Google AdWords, ad exchanges, and real-time bidding are only some of them.

There was a need to improve ad targeting and choosing the most relevant real estate for the ads, thus demand-side platforms were born. On the other side, publishers needed to gain some measure of control over their impressions prices while ensuring their ad space reached the coveted higher-paying advertisers, giving way to supply-side platforms. Other solutions that provide the user data for all this ecosystem to work properly appeared, as Data Management platforms, data analysis solutions, etc.

The state of Ad Tech in 2021 in numbers: 

  • Ad Tech market value (eMarketer): $134 billion. 
  • Market share distribution:

Market share distribution

While the biggest single player is Google, there are other companies that are looking to join the marketplace, whether with proprietary technology—like Apple—or other strategies.

  • U.S companies have increased the spending on programmatic advertising since 2020

In 2019, e-marketer forecasted that by 2020 the % of digital display ad spending will reach 83.9%. The reality surpassed the expectations, and as of May 2021, the percentage had reached 86%.

Digital Display Ad Spending

This change may happen because of the increase in the number of companies adopting automated solutions and undergoing digital transformation derived from the 2020 crisis. The market will continue growing and they expected companies to spend 91% of their advertising budget on digital display ads and programmatic advertising.

  • Companies spent $129 billion in programmatic advertising in 2020.

This figure is expected to reach $155 billion in 2021. (Statista)

So, what is Ad Tech, and why do we need it?

The Ad Tech industry includes all tools, resources, and software platforms that demand and supply sides use to interact, buy and sell ads and optimize advertising efforts.

  • Publishers use ad tech platforms to optimize their monetization activities through advertising.
  • Organizations use ad tech to plan and execute media buying and advertising optimization.
  • Advertisers use ad tech to deliver their ads to potential customers.

Without adtech, programmatic advertising wouldn’t exist. Ad Tech enables the delivery of highly targeted ads, implementing omnichannel marketing strategies among other techniques.

To understand why we need adtech let’s think about the way advertising was done years ago before the ad tech industry was born. Adverts were published with the goal to reach as large an audience as possible without almost no personalization.

While a massive reach can be useful to create brand awareness, this type of ad is less relevant for individual viewers. Adtech makes it possible to deliver advertisements to the most relevant audiences, at the right time and in the right context. Marketers then save time, money, and effort. Publishers, on the other side, can monetize their digital assets while giving end-users the most relevant offer for their queries.

The Ad Tech Solutions of CodeFuel

CodeFuel is an adtech company dedicated to providing monetization solutions for publishers and app developers. Our solutions include:

Search Mediation

CodeFuel offers optimized landing pages that maximize revenue for publishers. Regardless of the platform, you buy your media, our solution can help you increase your revenue. The monetization page is fully tailored for your business needs and the buying platform you use.

Media traders then can monetize search and achieve higher revenue by leveraging the mediation platform.

Website monetization

CodeFuel monetization solutions are designed to transform intent into revenue.

The user-intent-based search enables you to monetize your website with contextual ads. By matching the audience’s intent to the right ad, you enhance the user experience and earn higher revenue.

Search queries

Search queries give a customized search results page (SERP), hosted on your website,  with paid text ads, optimized by search technology.

Shopping ads

When you sign up for your website with CodeFuel, your users are served shopping fuel ads related to their intent. For example, when a user clicks on an ad for a new cell phone, the system directs them to a results page with relevant ads for this specific cellphone model.

Newsfeed

You can also add a news feed to your website. Powered by MSN, it includes over a thousand premium news publishers. This increases your user’s engagement, by encouraging users to have a longer dwell time on your site. Ultimately, this translates into more conversions.

App Monetization

CodeFuel uses intent-based search to monetize your mobile app or browser extension. Add search capabilities to your application, which returns a customized SERP with relevant text and shopping ads.

Key features of CodeFuel solutions

  • Simple integration: easy installation and integration with search engines and ad networks.
  • HUB Analytics: get the information you need to improve your performance with the analytics hub.
  • End to End Support: complete account management with strong business intelligence.

Ad Tech Basics

Advertising technology analyzes, manages, and delivers advertisements according to the requirements of the advertiser and target audience. Campaigns look to maximize the effect of ads, ultimately increasing ad revenue.

Who are the actors in AdTech?

The ad tech ecosystem consists of Advertisers, demand-side platforms, ad exchanges, ad networks, supply-side platforms, and publishers.

Publishers make their impressions and ad space available through supply-side platforms and ad networks at ad exchanges. Demand-side platforms bid on those ads through real-time bidding, selecting the most relevant ad types and placements for the target audience. Thanks to adtech, this supply-demand loop takes place in seconds, in the time that takes a page to load.

The role of user data

This loop of supply and demand generates revenue thanks to a key component: user data.

Understanding the user behavior and activity on a particular platform is the core of the effectiveness of programmatic advertising. User data is what makes it possible, via sophisticated software algorithms, to deliver the right ad to the right person at the right time.

You can buy user data or you can gather it on your own. But, the goal is to gather actual data from actual people (behaviors, interests, attitudes, and attributes) to be accurate in your targeting. The more you can refine ad targeting to the user, the better your bottom line will look. Why? Because the more the user relates to the ad, the more inclined they will be to click on it. That’s simple.

For publishers, the more your website, application, or extension marketing efforts apply to your target audience, the higher the value of your digital real estate for advertisers.

Advertising Technology for advertisers

Advertisers conform to the demand side of ad technology. Solutions geared for them aim to reach the target audience in the most efficient way and for the lowest possible price. These solutions help advertisers to run and optimize personalized programmatic campaigns, targeting and retargeting potential customers.

The advertiser’s ad tech stack may comprise some or all these types of tools:

  • A remarketing/ retargeting tool 

The fast pace of digital communications and the short attention span of customers means that sometimes a consumer will have interest in an ad but not follow through. Later, the consumer cannot find the ad or recall the name of the company (didn’t happen to us all?). Therefore, retargeting is essential for marketers to push consumers down the funnel.

  • Prospecting tools 

Expanding their customer base is a priority for most companies. Thus, machine-learning-powered prospecting tools help companies find their target audience in ad networks and ad exchanges. The more marketers use the tool, the more the system learns and refine the prospecting process.

  • Data management platforms

As we mentioned above, leveraging user data is a basic concept of programmatic advertising. Gathering, processing, and analyzing consumer behavior and transactional information makes it possible for companies to pinpoint the ads to the users to the dot.

  • Demand-side platforms

This is the technology that facilitates finding, bidding, and placing the ads at the right placement automatically. The system works automatically, serving the ads according to relevance for the end-user, the budget, and the criteria specified by the advertiser. Some of the top demand-side platforms are:

  • Facebook
  • Rocket Fuel
  • Amazon
  • AppNexus

Advertising Technology for publishers

Ad tech for publishers aims to achieve the highest price for the ad placement or impression from the most relevant buyers.

The right supply-side platform, like CodeFuel, can maximize the revenue of your digital property, whether is a website, an application, or an extension by delivering the most relevant ads to high intent users. It uses contextualization and intent-based technology to ensure the right ad gets to the user most likely to click on it.

This enhances the user experience, increasing the value of the website or app for advertisers, thus ensuring higher bids.

Elements of the Ad technology Ecosystem

Elements of the Ad technology Ecosystem

Image credit: Nagle

Ad exchange

This solution works as an intermediary in the real-time bidding process. Ad tech providers use ad exchanges to connect DSP to SSP. Publishers and advertisers don’t usually have access to the information shared in the ad exchange. However, their traffic and inventory pass through the ad exchange on the way to the advertiser or publisher, respectively.

Ad networks often buy both traffic and inventory from ad exchanges to sell on their own.

Ad Exchange

Ad network

Content delivery network

Ad network

Image source  

A CDN is a distributed network of servers deployed in multiple data centers. The goal of a content delivery network is to serve content to end-users with minimal latency and load times. CDNS are used in adtech to host ads so they are served to users from the closest server, minimizing the time to load the ads.

Ad server

These were among the first ad tech developments, used to host and store ads, then serving them on the publisher’s website. Nowadays, ad servers are full ad tech platforms for launching and managing ad campaigns, connecting publishers and advertisers.

Ad servers also collect data on ad performance to optimize campaigns. This technology is what makes it possible for media buying automation.

Agency Trading Desk (ATD)

Is a set of tools used by media agencies to plan, buy and manage to advertise. Organizations that are not yet ready to install a DSP or justify an in-house team use ATD services. The downside of using an agency trading desk is that advertisers don’t have direct access to the inventory.

Demand-side Platform (DSP)

Is a platform that allows users to buy inventory from various ad exchanges and supply-side platforms (SSP). Unlike an ad server, with DSP advertisers don’t need to negotiate prices with publishers. They set their CPM (Cost per Mille), target preferences, and can launch the campaign. A DSP also lets you set bidding rules and optimization tools that help run your media buying without having to be on top of it.

Supply-side Platform (SSP)

Is the publisher’s side of a DSP. This ad software enables publishers to make available, manage, sell and optimize inventory on their websites and applications. SSP also works based on real-time bidding. That means you don’t need to negotiate rates with advertisers. You only need to embed an ad tag and or a header to the website, which will allow the browser to request an ad for that place in the website. The tag is forwarded to the SSP, which automatically selects a suitable ad from the DSP according to the publisher’s data.

Data Management Platform (DMP)

A data management platform enables advertisers to understand in-depth their audience’s behavior. The DMP collects data from different sources, hashtags, mobile apps, cookies, APIs, etc. The platform uses third-party cookies to define the user profile and develop behavioral targeting in a DSP or ad server.

Customer Data Platform (CDP)

Customer Data Platforms go a bit further than DMP. Not only collects third-party data but also personally identifiable information (PII). Thus a CDP can create a complete profile with a name, company email, and other data, gathered under consent, from analytics tools, Customer Relation Management tools, subscriptions, newsletter signups, transactional systems, etc. This technology will probably be very popular once third-party cookies are phased out by Google in 2022.

Inventory and Ad Quality Scanning Tools

Inventory and Ad Quality Scanning Tools

Image source

These tools are critical to prevent ad fraud, which affects around 37% of ads. Inventory and ad quality scanning tools help prevent traffic bots, malvertising, and ad fraud by scanning the ads before being served on the website.

How Ad Tech simplifies media trading

Without ad tech, programmatic advertising wouldn’t exist. By automating the media trading process it takes the negotiation out of the hands of publishers and buyers, simplifying the process. Ad tech enables advertisers to bid on the most relevant ad placements for their campaign without having to check site by site. Simply input the requirements and budget and the platform will find, bid, and acquire the best ad placements at the best possible price, then serving the ads immediately.

On the supply side, ad tech helps publishers to sell ad space without having to find and negotiate with advertisers. It also makes it possible to sell impressions and inventory in seconds. Thus, ad tech is taking the hassle out of media trading.

The current trends in the Ad Tech Industry

Where is Ad Tech going in the next few years? The industry has grown by leaps and bounds over the last 20 years and is not willing to stop evolving. Here are the top trends that are shaping the ad tech industry:

Artificial Intelligence and Machine Learning

These two technologies help advertisers analyze massive amounts of user data, incorporating behavior analysis to predict the actions of a user online. This data is processed and correlated to serve the right ad according to the user intent at this moment.

Post cookies optimization

Google’s phasing out third-party cookies by 2022 is causing major upheaval in the programmatic industry. Some markets report significant drops in buyer’s bid rates as a consequence. In Germany, buyer’s bid rates decreased by 40%.

Companies are trying to find a viable user identity alternative that doesn’t affect them so much. Some alternatives may include storing data without using cookies by opt-in forms, universal ids, data pools, among others.

Programmatic everything

When Netflix and Amazon Prime changed the way we consume multimedia content from cable to digital, advertisers needed to transition with them. Now, programmatic advertising is making its way to television, audio, and podcasts to take advantage of the power of data for this segment of the market.

Ad Tech or MarTech?

While often confused, adtech and martech are two different industries. Is true, they intersect in some features and functions but each one has a different approach. Putting it simply is the same difference between marketing and advertising.

Advertising implies using paid media and content for promoting products and services. Marketing is a more broad approach to promotion, and inside the marketing mix of activities is advertising.

Ad Tech
Use cases
Paid ad campaigns
Channels
Display ads, video ads, PPC, social media ads, CTV
Purpose
Simplify media trading, optimize monetization revenue
Users
Media buyers, ad agencies, website owners, app developers, networks
MarTech
Use cases
Paid and unpaid promotion methods
Channels
Social media, email, direct sales, content marketing, video marketing, conversational marketing
Purpose
Facilitate and automate marketing strategy implementation
Users
Marketing teams, freelance marketers, sales teams
Ad Tech
Use cases
Paid ad campaigns
Channels
Display ads, video ads, PPC, social media ads, CTV
Purpose
Simplify media trading, optimize monetization revenue
Users
Media buyers, ad agencies, website owners, app developers, networks
MarTech
Use cases
Paid and unpaid promotion methods
Channels
Social media, email, direct sales, content marketing, video marketing, conversational marketing
Purpose
Facilitate and automate marketing strategy implementation
Users
Marketing teams, freelance marketers, sales teams

Make the most of your media trading with CodeFuel

CodeFuel ML and AI capabilities facilitate media buying while improving the revenue for publishers. Getting the right monetization solution is critical for success. Leverage user intent in your digital property by using search, shopping, and news to engage users and improve their experience, serving them ads matched precisely with their queries.

What Is Media Trading and Tips For Increasing Revenue

What Is Media Trading and Tips For Increasing Revenue

What is Programmatic Media Trading?

Definition: Programmatic media buying is an automated method of buying and selling digital advertising according to the decisions on a per-impression basis by supply and demand parties and in accordance with the rules of the exchange platform.

Put it simply, programmatic media trading is the buying of digital advertising space in real-time via an automated auction (real-time bidding). Sites that want to sell advertising space through this type of auction typically offer the inventory through a marketplace or ad exchange.

This method allows advertisers to reach the audiences they want, based on the value of the impression. On the supply side, it allows publishers to get higher-paying advertisers, since the higher the demand for your site audience, the higher the price for the impression.

Programmatic Media Trading

Source: Google

Programmatic mechanics 101

Programmatic media trading uses automated platforms to simplify the buying/selling process according to a predefined budget. Advertisers connect to an ad exchange placing offers using their set budget. The ad exchange connects to ad networks which then choose ad spaces that meet the target market, size, and budget of the advertiser.

Programmatic trading offers advertisers better targeting for their campaigns. It also improves the quality of advertisers publishers may get on their sites. The automated technology uses data management and algorithms to select the right ad to serve the right user at the right time and price.

To understand programmatic media buying, you first need to know key concepts related to this process.

There are three categories of programmatic media buying:

Real-time bidding (RTB)

In this method, inventory prices are decided through a real-time auction. Any advertiser or publisher can access it. Ad exchanges and supply-side platforms often provide the framework for this auction.

How does it work? Ad exchanges collect information about the page and the user viewing it every time an ad impression appears in a user’s web browser. The ad exchange auctions the impression off to the advertiser that is willing to pay the highest price for it.

Private marketplace (PMP)

These auctions have restrictions on who can participate. Often they select advertisers on an invite-only basis. In other cases, publishers may have an interview and selection process so advertisers can apply to enter the PMP.

Programmatic direct

In this case, a publisher sells media inventory directly at a fixed cost per mille (CPM – cost per impression) to advertisers.

Programmatic advertisements have three components: the supplier side, the demand side, and the exchange platform (more about this below)

What is the role of a programmatic media trader?

A media trader is the professional that spends the assigned digital budget within the RTB environments. A media trader needs to know where is best to buy inventory for an advertiser, meeting the campaign goals and ROI.

Media traders maximize the advertiser’s digital budgets aligning them with the business goals. They create real-time bidding and paid search strategies, implementing this in digital media buying platforms, to ensure the advertiser’s goals are met.

A media trader has four key responsibilities when executing an RTB campaign:

  • Know the market: media traders need to understand the market in which the impressions are happening. They define the strategy they will use, retargeting, prospecting, contextual targeting, and more.
  • Oversee ad operations: this is the technical side of launching ads, including the restrictions on the placement of the ads and managing attribution.
  • Trading: this involves managing a campaign, purchasing the ads, checking the reports, and making changes to the targeting. Is the responsibility of the trader to ensure the best possible outcome, achieving the highest possible ROI from the ad campaign.
  • Reporting: the media trader pulls all the reporting from the platform analytics and provides insights on the key drivers of that performance.

How does a media trading desk work?

A media trading desk can be a service provided by an agency or a software solution. The service or solution provides planning, management, and optimization of programmatic advertising campaigns. 

Advertisers benefit from an agency trading desk (ATD) that enables them to buy media for less than managing a campaign in-house. At first, you may think that ATD is similar to a demand-side platform (DSP). However, an agency trading desk offers the added value of programmatic advertising professionals on top.

ATDs provide the expertise of software developers, account managers, and data analysts that optimize the media buying for the agency’s campaign. ATDs work between the advertiser and the supply and demand platforms, and networks to purchase media. In this sense, they work similarly to AdTech platforms. They provide added services that regular demand or supply platforms don’t give to their clients like:

  • Planning
  • Campaign launching and optimization
  • Reporting and analytics

The State of Programmatic Advertising in 2021 ( Statistics)

Digital advertising has been changing in the last years driven by automation and innovative solutions that benefit both publishers and advertisers. Here are top statistics you need to know about the state of programmatic advertising in 2021:

Global programmatic ad spend will reach 155 billion in 2021

Global Programmatic Ad Spend

Global ad spending 2017 to 2021 (Statista)

Programmatic ad spending is projected to grow 20% in 2021. 

The percentage of growth is also seeing a rising trend. Companies are expected to spend 20% more on programmatic advertising in 2021 than in 2020.

And the rising trend will grow well into 2023, according to a study by an e-marketer.

In fact, programmatic display ad spending is growing more than non-programmatic display ads. 

Programmatic Display Ad Spending

Source

More statistics

  • The average cost per action (CPA) is $49 for paid search and $75 for display ads.
  • The US social media ad spends reached $43 billion in 2020. This was a 20% increase from 2019. (Source: eMarketer)
  • Marketers use ineffective strategies: Only 61% of marketers believe their marketing strategy is effective.
  • 40% of marketers consider that proving the ROI of the marketing efforts is a challenge.

Programmatic Advertising Trends

The pandemic affected programmatic advertising, but as was reported by MediaRadar in September, the numbers were bouncing back. There was a 36% growth in July 2021 from 2020 levels, which puts the market at pre-pandemic levels.

What’s next for programmatic advertising? Here are some trends to look for:

  • Avoiding “heavy ads” 

In August 2020, Google implemented a feature on Chrome that blocks “heavy ads” to improve the user experience. Any ad that Google considers as heavy is removed and replaced with a label that says: “ad removed”

What’s a heavy ad?

  • It has more than 4MB of network data usage
  • Uses the main thread for 60 seconds in total
  • Uses 15 seconds of CPU in a 30 seconds window

This means companies will need to optimize video ads to prevent being labeled as heavy ads.

  • Planning for Post Third Party Cookies (P3PC)

Third-party cookies are being phased out on Chrome by 2022 and are going to change the way companies carry programmatic advertising. Organizations need to prepare for 2022 when they can no longer use 3PC. That means they need to take a multi-layered approach to advertise.

  • Programmatic advertising spending will continue rising

The 2020 IAB Europe reports that companies will keep raising their budgets for programmatic advertising. Here are some of the reasons:

  • The number of companies investing more than 41% of their display budget into programmatic advertising grew to 70% in 2020.
  • 54% of advertising agencies buy almost half of their video ads programmatically.
  • Publishers report they are selling 81% of their inventory.
  • Adoption of emerging formats

New formats like connected TV (CTV) and Digital out-of-home media are slowly taking off. CTV in particular offers an opportunity for programmatic advertising. It allows advertisers to reach two different audience types at the same time. The people that want to watch TV on their timeframe and people that avoid linear TV.

What about Digital Media Trading Platforms? How do they work?

Technology is changing the way companies buy and sell digital advertising space. What once was done by human buyers, and advertising salespeople now is done through technology trading platforms.

How do they work? The media trading ecosystem consists of three key actors: demand-side platforms, supply-side platforms, and the ad exchange where they interact. Let’s explore how each one works:

Demand Side Platforms (DSP)

Demand-side platforms enable advertisers to buy impressions from publisher sites, targeted to their audience.  Publishers put their ad impressions for sale on ad exchanges. The DSP selects the right impressions for the advertiser in a real-time auction through real-time bidding.

How does this work?

The advertiser inputs the target audience preference and budget into the DSP. Then, the platform places programmatic bids using artificial intelligence (AI). The auctions take place in seconds and the highest bid ad is the one that appears on the page. The entire process happens automatically, without human intervention.

Best demand-side platforms

Some of the most popular demand-side platforms are well-known digital giants, others act independently of the media channel they run.

  • Facebook Ads Manager: they provide the buying platform and the biddable ad space. The ads manager enables advertisers to create, edit, manage, track and analyze campaigns from one place.
  • Rocket Fuel: is a self-service DSP, allowing companies to bring programmatic marketing in-house. The platform uses predictive AI to serve real-time ads relevant to the customer profile.
  • Amazon: Amazon Advertising Platform (AAP) uses the amazon algorithm to serve ads in real-time, leveraging precisely targeted campaigns for relevant customers. The downside is that users (advertisers/publishers) don’t get much information about conversion rates or click-through rates.
  • MediaMath: is an independent programmatic company for advertisers. One of its advantages, MediaMath can have full access to their data.

Supply-side platforms

A supply-side platform is a software solution geared to help online publishers sell their display, video, or mobile ad impressions. It works as the publisher-side of a demand-side platform. SSPs are designed to maximize the prices of impressions for publishers.

How does it work?

It allows publishers to connect their inventory to several ad exchanges, DSPs, and ad networks. Thus expanding the range of potential buyers for ad space. Real-time bidding helps publishers to get the highest possible rates. The SSP inputs impressions into ad exchanges, where a DSP analyzes and purchases them. The process, although looking complicated, happens in real-time in the time a page takes to load.

Best supply-side platforms

  • MoPub: is a hosted ad serving solution built specifically for mobile publishers.
  • Google Ad Manager: formerly Double Click for Publishers, works as an ad revenue engine that connects with the Google Ad Exchange. The downside is that it is locked to Google products.
  • Sharethrough:  is an omnichannel supply-side platform for programmatic advertising, geared to publishers, content creators, and app developers.
  • AppNexus: this is an independent programmatic marketplace, with the advantage of accessing data and managing the advertising offerings.

What are Ad exchanges?

Is a digital marketplace that connects advertisers and publishers to buy and sell advertising space through real-time auctions. They are used to sell display, video, and mobile ad inventory.

Best ad exchanges

PubMatic: it offers an easy-to-use interface and advanced advertising features like open-source header bidding.

Verizon Media: the company offers a large range of advertisers, serving over 2 billion ad impressions daily. Provides header bidding, programmatic direct selling, and management tools.

Google Adx: uses both open-auction and private-auction bidding models. The downside is that it has a high barrier of entry

Ad exchange vs ad network

Ad network

What’s an ad network?: is an intermediary that collects inventory from publishers and sells it to advertisers.

How does it work? Ad networks are organizations that collect, curate and sell publisher’s ad inventories. They charge a commission for the intervention, and the inventories are sold in bulk.

Ad exchange

What’s an ad exchange?: is a digital marketplace where advertisers and publishers buy and sell ad inventory directly.

 How does it work?

An ad exchange is a platform that gives an environment for advertisers, agencies, DSP, publishers, and SSP, to buy and sell media in a transparent way, in real-time.

  Ad Network Ad Exchange
Type Company services Technological platform
Target Users Agencies, advertisers, and publishers Agencies, Advertisers, DSP, SSP, publishers
Optimization speed Takes time to change Changes in real-time
Transparency Advertisers don’t know where the ads are served. Publishers don’t have information about the buyer Both parties have information on the transaction
Inventory Offers a premium inventory to advertisers Offers remaining inventory.
Pricing Depends on negotiation According to the bids placed
Pros Publishers can sell at a premium price because they set the price. The price is set automatically according to the bidding process.
Cons There is little transparency about where the ad is served and who is the buyer. Publishers may not get a premium price for their inventory.

Tips to Increase your Ad Revenue

Publishers need to develop a programmatic ad strategy that aligns with the overall sales strategy. The most important point is ensuring the quality of the inventory so it doesn’t get categorized as remnant inventory.

Publishers can follow some tips to increase the advertising revenue of a website. Let’s review a couple of them:

CPM advertising

In Cost-Per-Mille advertising, you get paid per thousand impressions of an ad. Publishers can use this method to set the prices they want to get for their ad impressions. This method works best when you have high traffic and a targeted audience.

PPC Advertising

Another popular method is Pay-Per-Click. With PPC ads, you get paid every time a user clicks on an ad served on your site. You can increase your revenue as a publisher with PPC by using an ad network like CodeFuel. An ad network will give you the control and information to maximize the revenue for the ads on your website.

Join affiliate marketing

You can also advertise and promote products for third parties on your website. You get paid every time a customer clicks on the link or makes a purchase through your site. This method can be combined with other advertising methods.

If you want to know more about ad revenue, check Ad Revenue: What Is and How to Increase it?  

Maximize your ad revenue with CodeFuel

Codefuel is a complete monetization platform that enables publishers to maximize their ad revenue through intent-based ads.

CodeFuel ad network enables publishers to generate higher revenue with text, display, and search ads. Tap into the broad reach of. premium search vendors while enriching the user experience. The CodeFuel Hub enables publishers to manage and optimize traffic with real-time data enhancing the value of their impressions. Learn more about how to increase your ad revenue with CodeFuel by contacting us. 

What is The Future of Media Trading

In its beginnings, media trading was conducted almost entirely on a managed basis. Later, vendors implemented self-serving platforms. The issue with programmatic advertising tools is that in reality, the user needs to choose their target audience, the budget, and other aspects of ad campaign optimization. With marketers using over 30 tools regularly, this can be a hassle and lead to inefficiencies.

New media platforms need to address several challenges:

User experience is king: Enhancing the user experience is key for a successful interaction between publishers and advertisers.

Mobile friendly: users need to manage the media platform across devices.

Transparency and clear information: buyers and suppliers need clear information about what is happening with the real-time bidding.  Buyers need to know where the ads will appear to optimize the campaign.

More Business Intelligence: new platforms use AI to target the audiences at the end-user level. The software will understand the target user’s intent, behavior, and preferences.

Final Thoughts

Publishers and advertisers cannot go blind when using media trading platforms. Programmatic platforms must provide a high-targeted user experience while maximizing revenue through transparency.

Media Buying The Ultimate Guide for 2021

Media Buying The Ultimate Guide for 2021

Paid advertising is a key part of every marketing strategy. As a marketer, you wonder how to get the most bang for your buck when buying ad space. In this post, we’ll explain how media buying works and give you tips to do it right.

What is Media Buying?

The term media buying refers to purchasing advertising space from a media channel. For instance, buying a time from a tv station, print space from a newspaper or magazine, or billboard signs.

Media buying in online marketing refers to purchasing advertising space in a blog or website, negotiating the price, and placement of ads.

So, What’s a Media Buyer in Marketing?

A media buyer is a person — usually a marketer—that is in charge of media buying for the company. Is someone whose job involves selecting and arranging payment to put advertisements on online channels at the most cost-effective rate.

Typically, media buying is done manually (direct) or with the help of technology tools (programmatic).

  • Direct buy: When media buyers negotiate ad inventory directly with publishers.
  • Programmatic buy: Media buyers use automated technology to buy ad placements.

According to eMarketer, 84.9% of digital ad spending belongs to programmatic buying today and is expected to rise to almost 90% by the end of 2021. So, direct media buying is in decline.

But which is best? There are advantages and disadvantages of both methods. While direct media buying is still used, the market is clearly going in the direction of programmatic advertising.

Programmatic advertising saves time and effort and allows for better targeting your audience. It offers real-time bidding, which gives advertisers the chance to get better deals for their ads.

Media Buyer in Marketing

Image source

The State of Media Buying Statistics

According to Statista, in 2020, global programmatic ad spends reached $129 billion, and spending is expected to pass the $150 billion mark by the end of 2021. Let’s check

How is worldwide media buying evolving? Let’s check some mind-blowing statistics.

Programmatic display advertising will reach $150 billion by the end of 2021. 

Programmatic Display Advertising

Source

  • 69.2% of all display advertising is bought through programmatic advertising
  • 18% of U.S companies surveyed moved the company’s programmatic buying completely in-house
  • 51% of U.S companies surveyed moved the company’s media buying partially to programmatic buying. 

The total digital ad spending  will reach $645.80 billion by 2024

Digital Ad Spending Worldwide

Source

How Digital Media Buying Works

Digital Media Buying

Source

Digital media buying or programmatic buying, buying ad impressions is automated. The negotiation step is conducted automatically in real-time through digital marketplaces. This automated buying structure has three main components:

Supply-side Platforms (SSP)

It is a software product designed to sell advertising space with the help of automation technology. Publishers use this software to sell their ad inventory to advertisers. The goal is to maximize the price of impressions for publishers. Examples of SSP include Google, Rubicon Project, AppNexus.

Demand-side Platforms (DSP)

Is the counter side of SSPs but from the advertiser side. Marketers use DSPs to bid on ad inventory and get ad impressions with the lowest price possible.

Examples of DSP:

  • Facebook Ads Manager
  • Rocket Fuel
  • Amazon
  • DoubleClick.

Ad Exchanges

In these marketplaces, advertisers and publishers buy or sell inventory via real-time bidding (RTB). The exchange works as a marketplace for advertisers and publishers to broker and auction ad space. Advertisers, marketers, and networks use the exchange to buy space for their ads. Publishers use the exchange to offer ad space for monetization.

Examples of ad exchanges:

  • DoubleClick
  • Microsoft Ad Exchange
  • Right Media Exchange
  • OpenX
  • App Nexus

Ad Networks

These marketplaces collect the ad inventory from publishers and sell it to advertisers. These intermediaries introduce the right publisher option to the right buyer. Usually matches suppliers and advertisers with the goal to maximize yield for both.

Ad networks work with real-time bidding but also are good options to sell remnant ad inventory.

Examples of ad networks:

Other options include private auctions, usually run by publishers which limit who can participate and selling ad inventory at a fixed rate per thousand impressions.

Learn more about the best ad networks of 2021.

Why Is Media Buying Important?

An effective media buying strategy can affect the bottom line of the company. It goes beyond the simple act of buying ad space. Selecting which channels will have the most impact on the audience while ensuring the advertiser pays the lowest possible costs is the ultimate goal of a good media buying strategy.

Ultimately, this enables companies to control the ad spending budget, and at the same time maximize conversions. By using programmatic advertising, the software takes all the hassle of negotiating with publishers, and automatically chooses the best ads for a publisher and the best space for advertisers.

What’s the Role of a Media Buyer?

Even with programmatic advertising, media buyers play an important role. A media buyer takes into account the target audience and marketing goals to find the ad type, channel, and site that maximizes the impact.

  1. Media buyers plan a media buying strategy according to the advertising strategy for the campaign.
  2. They select and buy the ad space at the best rates, keeping the budget under control.
  3. A media buyer’s job doesn’t end with buying the advertising space. They constantly analyze the data on the performance of the ads to optimize the ad-buying strategy.

Stages of the Media Buyer Process

Stages of the Media Buyer Process

Media buying consists of several steps that can be categorized into three key stages: Preparation, Execution, Optimization.

Stage #1: Preparation

This stage involves in-depth research and planning of the advertising strategy. The media buyer will take into account the target audience, the advertising budget, and the campaign goals to select the best channel where to buy the ad space.

Steps at this stage include:

  • Look at your target audience and decide how to reach it. 

Who are your ads intended for? What’s the demographics of your target audience? (age, gender, etc.). Where do they live? (geolocation), What interests them?.

Once you have your audience profile, try to find your target group for the specific campaign. Identify where to reach them. Are they active in social media? Which sites they likely frequent? Do they buy online? Where? Know what platforms and devices your target uses.

  • Look at your competitors

Where do they advertise? Which ad networks are they using? Check whom your direct competitors are targeting. Learning from the successes and failures of others save time and allows the advertiser to have an edge on their campaigns.

  • Define your media buying strategy

The media buyer should align the advertising to the campaign goals. If the target is on their mobiles when they search or use the product, mobile advertising can be the solution.

This involves choosing where to advertise and how. Should the buyer use one ad network or several? This will depend on the campaign strategy.

  • Plan the campaign execution

Allocate the budget according to the main goal (clicks, conversions, sign-ups, etc). Estimate how much is going to cost according to the pricing model you choose (Cost Per Mille, Cost Per Click, Cost Per Action). Plan all the marketing budget and account for unexpected expenses.

Stage #2: Campaign Execution

Here the media buyer should ensure the ads are appearing where they should, at the frequency they should, in front of the target audience, and in the right context.

Monitoring and tracking the progress is key to understand how the ads are performing. Look for metrics like customer engagement, number of conversions, or actions.

Stage #3: Optimization

Collect as much data as possible to analyze the effectiveness of the advertising space. Check if it generates as much revenue as expected. Analyze how the users reacted to the campaign and don’t be afraid to make changes.

Optimization should be an ongoing process, so monitor, analyze, test and repeat.

Optimization

Source

6 Tips to Do Media Buying Right to Get Results

Succeding in media buying is as much a matter of strategy as buying right. Here are some tips on media buying to get results.

1. Do your research

Analyze the factors that impact the success of the campaign. Check what are the ad rates in your industry, how much it cost ad placements in different sites for the size and type of the ads you plan to run.

2. Check the media where the ads will appear for relevance and context

3. Align the bidding to customer journey stages

4. Invest in highly targeted inventory

5. Stay on budget

Be careful when calculating the budget, calculate the overall budget according to the pricing models you chose. Keep in mind how to make the most of that budget while keeping the impact of the campaign. Allocate budget for premium locations where you can get more ROI for your ads.

6. Prepare for unforeseen purchases

Maybe you decided to run with one or two ad networks. Have an extra budget to account for unforeseen purchases. While you are working with these networks you may need to make changes to the campaign with requires more budget. Be prepared.

Media Buying Vs Media Planning

Media buying and planning are two different stages of processes. A media buyer focuses on getting the most impressions for the lowest cost. Media planning determines what channel is best for reaching the target audience. The media planner is the one behind the campaign strategy.

In larger corporations, media buyers’ and media planners’ jobs are carried on by different people. In smaller organizations, it is usually carried on by the same person.

How CodeFuel Can Help You as a Media Buyer?

Media buyers can optimize the revenue per each click and visit. Sometimes big names ad platforms are too generic in reach and offer a low ROI. Regardless of the platform you use, you can maximize the ad ROI with optimized landing pages that boost revenue across platforms and verticals.

CodeFuel search mediation partners with main search providers, you can deploy monetization pages on your own domain if you’re a publisher, or used the ready-to-go pages designed for different buying platforms. Start monetizing smart today with CodeFuel.