What is an Advertiser?

In digital advertising, an advertiser is an organization or individual that uses ads to promote their brand, products, or services on digital platforms. Advertisers participate in the digital advertising ecosystem by paying publishers to display ads on their websites and platforms, accessing those publishers’ audiences to communicate brand messages and generate engagement and conversions.

How do advertisers acquire ad space?

Depending on their budget, goals, and strategy, advertisers can acquire ad space from publishers in several different ways, chiefly the following:

• Direct deals: An advertiser chooses to purchase ad inventory directly from a site or platform publisher. In this case, the two parties will negotiate the details of the deal, including the ad types, ad placements, and pricing, without the assistance of an intermediary.
• Ad networks: An advertiser purchases the ad space via a third-party ad network. These networks act as intermediaries between advertisers and publishers, aggregating ad inventory from a wide variety of supply sources and distributing them at scale across a variety of platforms. 
• Programmatic advertising: An advertiser uses a software tool known as a demand-side platform (DSP) to automate the purchase of ad space. The DSP will connect to ad networks and use the advertiser’s targeting settings and machine learning to match them with publishers that have relevant audiences. It will then use real-time bidding (RTB) to automatically submit an offer for those publishers’ inventory when users visit their platform.

What pricing models do advertisers and publishers use?

Depending on their objectives, advertisers will purchase ad space from publishers using different pricing models. The most widely used models include:

• Cost Per Mile (CPM): Advertisers pay publishers for ad inventory on the basis of how many impressions the ad space generates, typically at a fixed rate per 1,000 impressions. This model is usually used by advertisers looking to build brand awareness.
• Cost Per View (CPV): An advertiser pays a publisher for each time their video ad is actively viewed. Viewers must watch a specified portion of the ad to meet the threshold for payment. This is usually used to build awareness via video-sharing sites.
• Cost Per Click (CPC): The advertiser pays the publisher each time a user clicks on their ad. This model is intended to help advertisers drive engagement by building site traffic, increasing product usage, or generating leads.
• Cost Per Acquisition (CPA): Advertisers pay publishers for each instance where a user performs a desired action, such as purchases, downloads, or sign-ups. This model is used by advertisers that have built awareness and engagement and are focused on making measurable gains through conversions.