For a long time, media advertising on the Internet was sold using the same principles as on TV with pay-per-impression at the lowest possible targeting audience. Advertisers with big budgets paid for the image effect, which is not directly related to immediate sales.
Against the background of contextual technology, the growth of media advertising segment looked sluggish. A long-term evolution of analytics tools, statistics and planning advertising campaigns gave way to a market revolution, when Google and Yahoo launched their exchanges of media advertising. They offered advertisers a rich toolkit of targeting and analytics and the ability to bargain for the audience in real time using the Real Time Bidding (RTB) technology.
RTB facilitates purchase and sale of advertising display based on auction. Trades take place in real-time. As soon as a user loads the page, the RTB-exchange system identifies user’s profile and automatically selects the best offer from the advertisers.
The Trading Desk technology was developed as software to serve as a communication tool between the different advertising exchanges, allowing for the redemption of ads while managing the activity programmatically.
Trading Desk is a revolutionary tool in the management of media advertising.
Trading Desk is a centralized platform for automatic and auction purchases of advertising for various advertising models such as display, video, paid search, and other channels. Trading Desk adjusts the purchasing of advertising and targeting using multiple functions. Another key functionality of a trading desk for advertising agencies and brand advertisers is that it aggregates statistics and reports from different sources in one easy-to-use dashboard.
Technically, Trading Desk is built on the DSP (Demand Side Platform) technology, which gains access to the RTB inventory through stock exchanges and stores it in its collected data. The DSP represents the interests of advertisers in the RTB ecosystem. DSP also analyzes the set parameters of the campaign, such as rates, the necessary volumes of clicks and audience data. DSP compares the information on the proposed purchase to the audience and makes a bet at the auction. The task of DSP is to optimize the purchase of the right audience through the use of data from different sources for more precise targeting.
The magic of Trading Desk can be described as follows:
- A dynamic way to attract customers, allowing purchase of advertising in real time, not in advance as practiced for many years in traditional media;
- Searches for a favorable price / quality of inventory and applies it to display the media in real time, like a stock exchange;
- Platform, which uses data and technology purchases of inventory in real time to aid advertisers through an effective tool to attract customers across digital media.
Currently, advertisers through Trading Desks, are actively buying online video advertising, mobile advertising, targeted advertising in social networks, and the traffic in the search engines. In USA Trading Desks can also buy ads in digital television.
Trading Desk may work as an independent platform; however most of advertising agencies design and own their own Agency Trading Desk (ATD).
Agency Trading Deskis a platform with a set of algorithms and teams of specially trained people who know how to translate customer requests (advertiser) into a language understandable to the RTB-system. In general, the functions of the Agency and advertiser are separated from ATD, leading to very little visibility into ATD’s functionality, design, and margins.
In the next blog of cycle «Trading Desk insight» we will talk about the history and causes of existing of the Trading Desk technology.