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How does programmatic ad mediation impact ad marketing?

Posted by Huzefa Hakim | February 20, 2024

How does programmatic ad mediation impact ad marketing?

Have you ever wondered how the right ad finds you at the perfect moment?

It's not a coincidence. It's the power of programmatic ad mediation working its magic in ad marketing. This technological marvel is revolutionizing the way ads are delivered, ensuring that they reach the audience most likely to engage.

With ad mediation optimising the delivery of ads across ad networks, exchanges and demand sources, the programmatic advertising market is all set to witness a huge surge in revenue generation as indicated by the latest statistics. According to the latest estimates, programmatically sold advertising was worth 546 billion U.S. dollars in 2023. This figure is expected to reach 779 billion by 2028.

Let's dive into the world of programmatic ad mediation and uncover how it's reshaping ad marketing

What is programmatic ad mediation?

At its core, programmatic ad mediation is a technology-driven process that optimizes the allocation of ad inventory to the highest bidder in real time, ensuring ads are displayed to the most relevant audience. It's the digital age's auction house but for advertisements, facilitating a seamless bridge between advertisers' desires to capture attention and publishers' need to monetize their content effectively.

The goal is to ensure the most lucrative and relevant ad is shown to the user at any given time. Here’s a closer look at each step in the ad mediation process:

  1. User interaction triggers ad request: When a user visits an app or a webpage that contains ad spaces (also known as inventory), the system triggers an ad request. This request is the first step in the mediation process, signaling the need to fill the ad space with relevant content.
  2. Ad Request sent to the mediation platform: The ad request is sent to the ad mediation platform, which acts as the central hub for managing the distribution of ads. This platform holds the key to deciding which ad will be shown, based on a variety of factors including advertiser bids, user relevance, and historical performance.
  3. Mediation platform evaluates ad networks: The mediation platform has connections to multiple ad networks and exchanges. Upon receiving an ad request, it evaluates which network or exchange has the best ad to display. This evaluation is based on predefined rules, real-time bidding (RTB), or a combination of both, considering factors such as potential revenue, ad relevance, and user targeting criteria.
  4. Selection of the best ad: The platform selects the best ad based on the criteria mentioned above. The selection process is highly dynamic and can involve real-time auctions where ad networks bid for the ad space in milliseconds. The highest bidder, assuming their ad is also relevant to the user, wins the opportunity to display their ad.
  5. Ad delivery to the user: Once the best ad is selected, it is delivered to the user's device and displayed within the app or webpage. This step completes the ad mediation process, but the cycle begins anew with each new ad request.
  6. Performance tracking and optimization: The effectiveness of the displayed ad is tracked in terms of user engagement (clicks, impressions, conversions). This data feeds back into the mediation platform, helping to refine and optimize future ad selections. Over time, this leads to more effective ad placements, higher revenues for publishers, and better ROI for advertisers.

Is there a possibility of ad fraud in the mediation process?

Ad fraud is a critical concern in the ad mediation process, with various types of fraud impacting different steps of the journey. Here's a detailed breakdown of how and where ad fraud can infiltrate the ad mediation process

At the ad request initiation

  1. Fraudulent Ad Requests: Bots or compromised devices can generate fake ad requests, mimicking genuine user behaviour. These fraudulent requests inflate traffic statistics, tricking advertisers into paying for ads that are never seen by real users.

During the ad selection process

  1. Bid laundering: Fraudsters manipulate the bidding process by passing off low-value ad inventory as high-value, tricking advertisers into paying premium prices for subpar ad placements.
  2. Domain spoofing: Here, fraudsters misrepresent low-quality or irrelevant websites as reputable publishers. Advertisers believe they are bidding on premium inventory, while their ads end up on unsuitable sites, potentially damaging brand reputation.

At the ad delivery phase

  1. Pixel stuffing and Ad stacking: In pixel stuffing, an ad is placed in a 1x1 pixel frame, making it invisible to users but still registering as a viewed impression. Ad stacking involves placing several ads on top of one another in a single ad slot, where only the top ad is visible, yet all ads are counted as viewed.
  2. Click injection/fraud: This occurs when fraudulent actors inject fake clicks or generate click spam for ads that were never actually viewed by a user, falsely inflating engagement metrics.

Post-ad delivery (performance tracking)

  1. Conversion fraud: This involves generating fake leads or sales to mimic the appearance of successful conversions from ads. It can severely distort the perceived effectiveness of an ad campaign.
  2. Viewability fraud: Ads are delivered to locations where users cannot see them (e.g., hidden iframe) or to bots designed to simulate human viewing patterns, undermining the integrity of engagement and viewability metrics.

As programmatic ad mediation continues to evolve, it promises to refine ad marketing by enhancing targeting and efficiency while posing challenges like ad fraud. ClearTrust emerges as a pivotal ally in this landscape, armed with custom solutions and transparent practices to safeguard advertisers' interests. Embracing the future of ad marketing means not just leveraging programmatic ad mediation's benefits but also partnering with vigilant protectors to ensure a secure, profitable journey.