Programmatic crypto ads that make use of on-chain behavioral targeting are effective and powerful. It is a strategy that reportedly outperforms traditional fiat ads for crypto exchanges and Web3 projects. This is because they can precisely identify and engage high-value, relevant audiences based on real-life blockchain activity and proven interest, resulting in significantly higher engagement and conversion rates.
In this article, we discuss Programmatic Advertising, what it is, how it works, how to launch a programmatic advertising campaign, and its relationship to On-chain behavioral targeting for exchanges and fiat ads.
What Is Programmatic Advertising?
Programmatic advertising is media buying enabled by automation and data science. You know those ads that are surprisingly relevant and follow you from one site to another? A programmatic ad is the system behind it. It puts your brand in front of the right audience at the right time.
The intention behind programmatic ad buying is straightforward: use software to determine whether an ad impression is worth bidding on based on who’s viewing it. This should be done in real time. Advertisers can now set rules, down to the specific behaviors and devices, and the programmatic advertising process does the rest.
How Do Programmatic Ads Work?
The second a user reaches a webpage or opens an app, a concealed auction begins. This is the flow: User visits → SSP → Ad Exchange → DSP bids → Ad served.
Step 1 (Targeting):
The user visits a site where ad spaces are available for the essential campaigns.
Step 2 (SSP request)
The page loads, flags the ad space, and sends a request to a supply-side platform (SSP).
Step 3 (That SSP passes it to an ad exchange)
The exchange is a high-frequency marketplace where demand-side platforms (DSPs) compete for impressions.
Step 4 (Ad Serving)
Once bidding occurs, the highest bidder wins and has their ad in front of the user visiting the website.
Step 5 (Display and optimisation)
If a bid wins, the ad supplies instantly. Simultaneously, advertisers can gather performance data to improve targeting and bids in the future. Data is what decides who wins.
DSPs in Programmatic Advertising?
See the DSP as your command center. It helps you initiate and manage programmatic advertising campaigns extensively, links you to various ad exchanges and data management platforms, and pulls in your incentives. Once plugged in, it utilizes your rules and targeting criteria, such as recent browsing behavior, wallet holdings, or geo-data, to determine when to bid and how much to offer.
A good DSP helps you pinpoint the exact users you want, at the right time, with the right message. Top DSPs combine audience data with algorithmic bidding.
SSPs (Supply Side Platforms) in Programmatic Advertising
Supply-side platforms are what tech publishers use to sell their digital ad inventory in real time. As DSPs help advertisers buy ad space, SSPs help publishers price, manage, and deliver that space efficiently.
When a page loads, the SSP reads available placements and pushes that data to the ad exchange. Afterwards, DSPs compete to place an ad. Although the SSP not only serves as a negotiator but also strongly influences the outcome.
Ad Exchange in Programmatic Advertising
This is the digital auction house where buying and selling meet. It connects DSPs and SSPs in real time, allowing them to trade individual ad impressions within milliseconds in a wider programmatic ecosystem.
The SSP flags the available ad slot when the user opens an app. It then sends it to the exchange. That is where DSPs submit bids on the basis of targeting rules like the type of device, wallet activity, geo, and session behavior. The highest bidder wins, and the ad shows even before the page loads..
It is similar to how the stock exchange works, but for ads. In the digital advertising space, each impression is a tradable asset, but instead of stocks and bonds, it’s user attention that’s traded. Algorithms do the work, using RTB (real-time bidding ) to maximize the effectiveness of ad spend.
DSP, SSP, and Ad Exchange– 3 Main Components
Although DSP, SSP, and Ad Exchange power every programmatic transaction, they serve very different purposes:
Demand Side Platform (DSP)
DSP is the buyer’s representative. It aids advertisers in deciding which impressions to bid on, what ad to display, and how much to offer. It utilizes gathered data from the audience and campaign objectives for smarter bidding.
Supply Side Platform (SSP)
SSP is the seller’s agent. It helps publishers set a base price, manage their inventory, and push available ad spaces into the auction. With SSP, impressions are sold to the highest and most relevant applicant..
Ad Exchange
This is where the auction takes place. It is the middleman between SSPs and DSPs. Its role is to pair bids with impressions in real time and secure the transaction in milliseconds.
What Are The Types of Programmatic Buying Models?
Programmatic campaigns depend on your goals, budget, and the level of control you want over inventory. For this to sail smoothly, you need to choose the right buying model. There are 4 main types:
1. Open Auction (RTB)
RTB is where most programmatic campaigns begin. With the open auction model, you bid on every impression as they become available, the moment a user lands on a page or opens an app. It’s fast, seamless, and perfect for campaigns that need reach and real-time efficiency.
2. Private Marketplace (PMP)
PMP offers a tighter path for better control and smoother placements. These auctions, strictly by invitation, allow advertisers to bid in a private pool put together by the publisher. This ensures access to top media sites, stronger brand safety, and predictable environments.
3. Preferred Deals
With preferred deals, you set a fixed CPM with a publisher and get early access to their impressions. It is more of a direct offer. As long as the user matches your audience or criteria, you get the first shot.
4. Programmatic Direct
This type does not involve auctions. It deals with ad placements, rates, and lock-in volume.
Launching a Programmatic Advertising Campaign
The success of a programmatic advertising depends on having a clear structure. Here are 6 key steps to follow:
Step 1: Specify Campaign Goals
Any ad campaign that wants to be successful must possess a clear objective. Define what your brand wants to achieve before you dive into the campaign. Each objective determines how you build your campaign.
“Acquire new users” isn’t a real goal. “Acquire 12,000 new signups from the US at $3.30 CPA in 30 days” is a much more detailed objective.
Step 2: Select the Right Buying Model
After defining your objective, selecting the right programmatic model is the next step. Ensure you pick the model that pairs with not just your wallet size, but with your control and risk tolerance.
Step 3: Select the Right Demand Side Platform (DSP)
It is essential for your DSP to align with your objectives because it is the control center of your programmatic ad campaign. Key things to look for: targeting options, inventory depth, ease of use, reporting tools, and support.
For niches like DEX traders, Web3 game audiences, or fintech users, you’ll need a DSP that goes deeper than standard demographics.
Step 4: Create and Upload Inventives
Different formats exist in programmatic campaigns. Includes native placements, display banner ads, and video ads. Every DSP has specific upload specs for size and file type. Ensure you test multiple versions.
Step 5: Define Budget, Bids & Targeting
When your creatives are in place, defining your ad spend and target audience is next. To guarantee success, your daily and total budgets must match your objective, with pacing set to avoid early burn.
Programmatic Advertising and On-Chain Behavioral Targeting
Search terms and demographics fall under traditional behavioral targeting. But with on-chain targeting, it analyzes public blockchain data to obtain direct insight into actual user behavior and ownership of assets:
1. Asset Holdings
Ad campaigns can target users with a particular portfolio or those holding specific tokens(e.g., users holding $50k–$150k in crypto assets).
2. Wallet Activity
Users can be identified based on their transaction history, frequency, and the kinds of protocols they interact with – NFTs, DeFi, etc.
3. Intention Signals
Advertisers can identify users with high purchase intent by combining on-chain data with off-chain signals.
4. Targeting Competitors
Users who have recently interacted with competitor exchanges or specific DeFi protocols can be identified and targeted. With this data, conversion to a new platform is possible.
Traditional Fiat Ads Performance
Relevance and accuracy are the main advantages of on-chain targeting over traditional (fiat) advertising methods. This automatically translates into better performance:
1. Higher Conversion Rates
By reaching users who have a demonstrated history of relevant on-chain activity, the ads are significantly more relevant, increasing the likelihood of desired actions like signing up, depositing funds, or trading.
2. Concrete Outcome
Brands can see how their ads perform and confirm because the blockchain technology is transparent. They can also track where their ad spend goes and who sees their ads. With this, there is a clearer ROI.
3. Targeted Ad Spend
Ads reach audiences most likely to be interested in what is being offered. So this means ad spend is highly optimized.
4. Enhanced User Quality
With on-chain targeting, quality users are assured. They are more likely to generate massive trading volume and long-term interaction, rather than users who just create an account and leave the rest.
