In programmatic advertising, many behind-the-scenes activities occur when trafficking and displaying the ad. In this environment, codes append to the ad spot to ensure it serves at the right time and to the appropriate audience. They also enable tracking of ad performance. The two scripts most commonly carrying this out are ad tags and click tags.

Without being overly technical, here’s a simple explanation of each and why they matter.

What Are Ad Tags?

Ad tags describe HTML or JavaScript code snippets that send a request to the ad server to display an ad as trafficked. Their primary job is to enable the right ad placement to the right user at the right time. Secondarily, they allow for tracking of the ad and recording engagement metrics.

Ad tagging in programmatic includes display (static or video), geofencing and other tactics.

Ad tags contain a lot of information, including the ad’s size, format and other data. There are several third-party ad tag use cases.

Third-Party Ad Tag Use Cases

The use of third-party ad tags involves several different groups within the digital advertising ecosystem.

  • Publishers: These are the owners of inventory, and they use ad tags to sell this to advertisers. Publishers can then serve ads based on their targeting criteria.
  • Advertisers: Publishers can provide ad tags as a confirmation to display the ads that adhere to their requirements. They may contain data about the user, including location, browser or carrier.
  • Digital advertising software: These platforms employ ad tags to manage the process of ad serving, which connects the ad to the inventory. They use them when packaging creative that traffics to a DSP (demand-side platform).
  • Data management systems: These applications use ad tags to extract user data and create profiles for future campaigns.

How Does an Ad Tag Work?

Here’s a scenario of an ad tag at work.

  • Publishers install ad tags on their web pages that specify the kind of placements available.
  • Someone visits that website, activating an ad tag call, which sends the request to the ad server, which receives data about available creatives, sending requests to third parties for additional information, if needed.
  • The DSP receives the user information and employs it for targeting and reporting.
  • Real-time bidding occurs to display an ad to the user.
  • The highest bid wins, and the DSP fetches the creative to serve the impression.

What Is a Click Tag?

Click tags, also called tracking tags, are also scripts. Their job is to provide the URL that tracks the clicks on the ad. It’s essential to measuring click-through rate (CTR). All major DSPs support click tags, and they work for all types of banner ads, including HTML5.

These tags also support retargeting and conversion tracking. Typically, a third-party digital platform adds these automatically.

Tagging Shapes the Digital Advertising Ecosystem

Both of these tags do a lot to make the digital advertising landscape work with precision. They support targeting and serving the right type of ad as well as measuring its performance.

Learn more about the ad life cycle by reading our post, Programmatic Ad Buys 101.