Programmatic advertising is the buying and selling of online ads by software, usually in an auction that runs while a web page or an app is loading. It is also called programmatic ad buying. Most of the ads you see on news sites, in free apps and on smart TVs are now bought this way.
Here is a typical case. During an IPL match, a student in Lucknow opens a cricket news page on her phone. The news site is the publisher: the business that owns the page and has space for ads on it. Beside the match report there is an empty ad slot. One showing of one ad to one person is called an impression. Before the page finishes loading, the site's software offers this impression to the software of many advertisers at once. Each advertiser's software makes a bid, which is the price it offers to pay. The highest bid wins the auction, and the winner's ad appears beside the report. All of this takes less than a second, and no person decides any single sale. The method is explained on the page on real-time bidding (RTB).
Ad space is priced per thousand impressions. This price is called the CPM, cost per mille, and it is explained in impressions and CPM. So a winning bid of ₹80 CPM means that the advertiser pays 8 paise for this one showing.
The software falls into four groups. Buy-side ad tech is the advertiser's side. An agency plans the campaign in media planning and buying software. A demand-side platform (DSP) then decides, for each impression, whether to bid and how much.
Sell-side ad tech is the publisher's side. A supply-side platform (SSP) offers each impression to many buyers and sets a floor price, the lowest bid it will accept. The auction itself runs on an ad exchange, the marketplace where the buyers' software and the sellers' software meet.
Advertising channels are the places where the ads appear. They include free mobile apps, smart TVs, the prescription software that doctors use, and the search results of a retail media network on a shopping app.
Ad measurement and attribution checks the results. Ad verification checks that a real person saw each ad, and not a bot, a program that pretends to be a person in order to collect advertisers' money. This is called ad fraud. Other tools work out which ad led to each sale, and whether the sale would have happened anyway.
Two changes are reshaping the field. First, browsers and privacy laws are limiting third-party cookies, the small files that let advertisers follow a reader from site to site. So ads are again chosen more by what a page is about, and less by who is reading it. Second, Google, Meta and Amazon sell most of their ads inside their own apps, with their own tools and data. These are called walled gardens. The independent buyers and sellers described on these pages compete around them, and many of them build their software in India.