The Ad Stack Explained
The term ad stack is one you’ve probably heard thrown around agency meetings, watching a business news program, or from the mouth of a well-intentioned uncle trying to figure out what you do for a living. In the modern world of digital marketing, it is a buzz word with many complicated definitions.
In a nutshell, the ad stack is the series of companies and technologies on the internet that gets an advertiser’s message in front of the right consumer at the right time, so they will take some sort of desired action like buying a product or contacting a sales rep.
What that looks like in practice varies. You could be talking about one large company that offers an out-of-the-box solution (simple but limited), or a custom-built solution that involves plugging in different technologies to fulfill complex marketing objectives.
I will try to illustrate the basic idea with the analogy of an apple traveling from its tree to the end consumer, who is hungry for some fruit.
The first party in the ad stack is the advertiser. Whether they are a brand or the brand’s agency, a humble marketing intern or a full-fledged trading desk, they are trying to find their target audience or consumer, get a message in front of them in the form of an ad impression, and move them through the funnel to complete the marketing objective. Think of them as the apple-eater, whose objective is sales instead of eating a tasty, worm-free apple.
The Demand Side Platform (DSP)
If you were looking to buy an apple, you’d likely go to a grocery store, which can offer you apples at a range of prices, varieties and sizes. Think of the DSP as the grocery store.
DSPs provide the UI and functionality required for an advertiser to create and manage their many advertising campaigns. They can choose the demographic, behavioural and other targeting dimensions of their ideal audience and restrict the kinds of impressions that match their objectives (mobile vs. desktop for example). Many also allow advertisers to integrate their direct campaigns (where they have made deals with specific publishers) with various types of open real-time bidding (RTB) campaigns in one platform.
The Ad Exchange
Many grocery stores source the apples their customers want by purchasing them from large produce terminals. Loud and busy, produce terminals are physical markets where the grocery stores can connect with the farmers who grow the produce, learn about the available inventory, negotiate prices, and in real time purchase the product their customers want.
Ad exchanges work the same way by connecting DSPs with supply side platforms (more on them in a minute) who have access to the ad impressions advertisers want to reach. In a fraction of a second, the exchange compares the details about the impression (like data from the publisher or first, second and third party data about who will see the impression) and the specifics of the advertiser’s campaign (audience & pricing settings they chose in the DSP’s UI).
Once it has a list of all eligible advertisers (those who would want to buy this specific impression), the exchange passes forward the ad of the highest bidding advertiser and charges them for the impression. Automatically, ad exchanges perform this function for all kinds of ad formats and all kinds of users, literally millions of times a second. 24/7, 365.
The Supply Side Platform (SSP)
The SSP represents the other side of the exchange (the farmer at the produce terminal). Like the DSP, the SSP is a platform that allows publishers (of both websites and apps) to manage how they monetize the impressions they show their audience. Among many other features, SSPs allow publishers to integrate their existing direct relationships with access to open exchanges, pass along data about their users for more informed ad buying, and set the minimum price an ad impression is worth to them (often opting for other monetization options when active bids are below their threshold). SSPs allow publishers more control than ever to manage the experience of their users so it is inline with their brand, and keep users wanting to come back.
Finally, and probably easiest to understand, are the publishers (the apple tree). Through creating great content, developing compelling mobile apps, or whatever it is they do, publishers bring users into the ecosystem by engaging them, curating them, and learning as much about them as possible (in an uninstructive way) so that they can show the right advertiser’s ad, at the right time, and make money.
Where Does Perk Canada Fit?
Perk.com Canada is a digital media publishing company. We develop large, targeted audiences across a range of channels, and deliver them relevant, authentic, engaging content created by experts in the space. We fill the Publisher slot in the ad stack, in the end connecting advertisers with our highly-engaged audiences in non-intrusive ways at the right point in the funnel, to help fulfill advertiser’s objectives.