By Brett Konen on March 24th, 2021
What's In a Programmatic Ad Tech Stack, & How Much Does It Cost?
The ongoing growth of programmatic advertising as a whole is built on the increasing sophistication of its associated technology. Demand-side platforms, data onboarding services, geofencing technologies, brand safety verifications—all of these and more work together to ensure that effective programmatic ads reach their ideal customers in the right place, at the right time, and in a compliant manner.
While these synergies make programmatic advertising a powerful tool in the digital marketing toolkit, they also make integrating a full programmatic ad tech stack increasingly challenging as new technologies become available, data compliance requirements evolve, and brand safety and ad fraud become ever more important to ensure and combat, respectively.
Below, we list each of the components that go into creating a complete programmatic ad tech stack, offering a few examples of technologies commonly used today and providing a (very) general estimate of how much a brand or agency should expect to spend if they plan to integrate them in-house.
At the end of the article, we also explain how companies working to launch a programmatic advertising program can outsource the licensing and implementation of these technologies in order to get their programmatic ads up and running as quickly, cheaply, and easily as possible.
How to Build a Programmatic Tech Stack
Programmatic ad tech comprises an extensive ecosystem of cutting-edge digital advertising technologies. Each element must be set up to interface with the others in order to build a robust tech stack.
In the most basic terms, programmatic advertisers and their agencies use demand-side platforms (DSPs) to bid for certain ad impressions online. Publishers, representing the other side of the programmatic equation, put their ad space up for auction via supply-side platforms (SSPs), and ad exchanges play matchmaker between the two sides to sell the ad impression to highest bidder in the time it takes a given web page to load.
But naturally, there’s a lot more to programmatic ad tech than the liaising of DSPs and SSPs. Brands working to bring programmatic advertising in-house, or agencies wanting to offer programmatic advertising as a service, need to consider all of the following pieces of the puzzle. Most of them will need to work across display, mobile, native, video, CTV, and digital audio advertising channels if you’re planning to run omnichannel programmatic media campaigns.
Demand-Side Platforms (DSPs)
As noted above, advertisers and ad agencies use DSPs to set the parameters of “real-time bids” for ad impressions based on relevant attributes of the ad space and the viewer navigating to it. These attributes may be demographic, psychographic, behavioral, contextual, or location-based.
DSP examples: Top programmatic DSPs in 2021 include The Trade Desk, Sizmek, Basis, MediaMath, Choozle, and DV360. Paid search platforms like Google Ads and social platforms like Facebook Ads are also examples of DSPs, but these do not provide the robust functionality of a true programmatic demand-side platform.
DSP costs: For an industry-leading platform like The Trade Desk, you’ll need to meet a monthly minimum media spend requirement, and you’ll also be charged a portion of those media costs. Expect to pay a minimum license fee of about $17,000 per month or 17% of media, whichever is greater.
You’ll also need to pay a set-up fee when you first sign on—so if you aren’t spending $100,000 per month from your first month onward, the cost of a top-tier DSP can easily become prohibitive. Most brands and agencies unable to justify this pricing default to using the more basic features of Google Ads and/or Facebook Ads instead.
Data Management Platforms (DMPs)
Programmatic advertising relies heavily on data to be effective, and your campaigns will likely leverage multiple data sets, which can include first-party data, second-party data, third-party data, or zero-party data. Data management platforms collect and segment all of this data for activation in your programmatic ad campaigns.
DMP examples: Lotame, Salesforce, Nielsen, Oracle BlueKai, and Adobe Audience Manager all offer some form of data management. Some DSPs like The Trade Desk may include data management elements, but less expensive platforms often necessitate licensing one separately.
DMP pricing: Expect to spend about $10,000 per month on a programmatic data management platform.
Secure Data Onboarding
In order to onboard brand or client data and run your programmatic campaigns in a secure and compliant fashion, you’ll need a way to get that data from places like a CRM into your DSP and/or DMP. Data onboarding technologies can securely upload and anonymize data sets without granting anyone outside the company the ability to actually view that proprietary data.
Data onboarding services: LiveRamp, Signal, FullContact, Segment, and BounceX can handle secure data onboarding for programmatic ads.
Data onboarding pricing: Expect data onboarding to cost somewhere in the neighborhood of $2,500.
Third-Party Data Providers
Once you have any first-party data onboarded, you’ll want to pair it with additional third-party data to expand the reach of the campaign and target the campaign’s most likely customers. Choosing between third-party data providers and selecting high-quality data sets is something advertisers get better at over time through research, trial, and error.
Examples of third-party data providers: Oracle, Lotame, Nielsen, Bombora, and many more sell third-party data sets, which can be integrated into your ad campaigns for the purposes of targeting new audiences and expanding campaign reach. Some providers specialize in a certain type of data—Bombora, for example, focuses exclusively on B2B data with an emphasis on intent data.
Third-party data pricing: First, you’ll need to license a DSP or DMP to activate third-party data for your programmatic campaigns. Once you have, the more niche the data, the higher the cost: Some data providers might charge 20% of media or a flat CPM fee of $1–3, while specialty providers may charge a monthly minimum of $10,000 or more.
Dynamic Creative Optimization (DCO)
Dynamic creative optimization technologies let you personalize messaging for specific audience segments within an ad campaign—for example, those who have already clicked on an ad from the brand in the past.
Examples of DCO ad tech: Flashtalking, Celtra, and Amobee are popular DCO technologies.
DCO pricing: Generally, pricing will be a monthly minimum of $2,500 or more; alternatively, the DCO provider may act as your ad server with a fixed rate of between $0.25 and $0.75 added on top of your CPMs.
Brand safety is of utmost importance to programmatic advertisers. To ensure a client’s or brand’s advertising content doesn’t show up in unsavory contexts, you’ll need to leverage ad tech that focuses on ensuring the suitability of every ad impression. Some brand safety verifications are built into DSPs, but for optimal performance you’ll also want to leverage additional services.
Brand safety technology examples: DoubleVerify, MOAT, LiveIntent, and AdGooroo can all work to ensure the brand safety of programmatic ad campaigns.
Brand safety ad tech pricing: Brand safety verifications are typically handled through the DSP: Applying different brand safety features will lead to different pricing. Pricing can range from $0.05 per CPM to $0.20 for more robust brand safety technology.
Mobile App Owner Targeting
Mobile app owner targeting helps advertisers reach audiences that have downloaded specific apps on their mobile phones or tablet devices.
Mobile app targeting technologies: PushSpring, Marketo Engage, Simpli.Fi, and Birdeye all offer this service.
Pricing for mobile app owner targeting: Is generally a premium added to the CPM, ranging from $1–3.
Geofencing lets your brand or client show ads in a specific geographical area, such as within a boundary drawn around a conference or event.
Examples of geofencing ad tech: Many mobile app targeting technologies, including Simpli.Fi and NinthDecimal, also offer geofencing technology. Other providers, such as Factual, specialize primarily in geofencing.
Pricing for geofencing technology: Handled through the DSP, geofencing can cost $1–3 on top of CPMs, but may be more for anything requiring custom setup, like having the tech provider draws the geofences or provide specialized reporting. The latter tends to start around $10,000 per month.
Showing ads against relevant content on the internet will increase your programmatic campaigns’ click-through and conversion rates. Contextual targeting technologies ensure that the chosen content is actually relevant, particularly in cases where a page’s keyword could be interpreted in various ways.
Examples of contextual targeting technology: Peer39 and GrapeShot are two popular contextual targeting options.
Pricing for contextual targeting technology: Can be anywhere from $0.10–1.00 added on top of CPMs.
Finally, you’ll want to showcase the results of the campaigns you’re running with robust reporting technology. A good reporting dashboard will integrate metrics across all channels of your ad campaigns, distilling the results into clear, relevant, and actionable insights based on your brand’s or client’s KPIs. These should be readily available for review by key decisionmakers on your or your client’s team at any time.
Reporting dashboard examples: For reporting across multiple advertising channels, solutions like TapClicks or Datorama are popular. Options like Google Analytics also offer basic reporting for paid search or basic display ad campaigns.
Pricing for reporting dashboards: Entry-level dashboards can start around $1,000 per month, but more powerful technologies can easily cost upwards of $3,000. Certain platforms may charge a flat rate or percent of media instead, meaning the cost for reporting can vary widely.
The Best Way to License Programmatic Ad Tech
The benefits of building your own programmatic tech stack include gaining programmatic expertise and having complete control over your programmatic ad ecosystem, but as many will have noticed in scrolling through this list, the challenges include an immense amount of research, expense, and expertise required to build one.
Often, integrating a complete programmatic ad tech stack from scratch is too expensive for small to mid-sized brands or agencies to handle, particularly for those looking to get their programmatic revenue stream up and running as quickly as possible.
For anyone but the largest enterprises, we suggest working with a partner instead. This lets you leverage the full power of their fully integrated tech stack right away rather than trying to start from scratch on your own. In addition to being cheaper, faster, and easier, there’s no additional effort required to relicense, stay up to date with industry trends, or add new technologies as they appear on the market—the right programmatic specialist agency will take care of this due diligence for you on an ongoing basis, and the pricing you negotiate with them up-front is all you’ll pay for it.
At PrograMetrix, we specialize in programmatic so you don’t have to. To learn more about how we partner with agencies to provide programmatic advertising services, check out our eBook or get in touch here.
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