What is Programmatic Advertising?

What is Programmatic Advertising?

Chances are you’ve heard of programmatic advertising. Agencies, blog posts, and marketers at conferences have been discussing this kind of advertising for some time. Programmatic has changed the game as we know it, and using it could change the way you advertise to your target audience.


What Is Programmatic Ad Buying?

The term ‘programmatic’ refers to the kind of software used to purchase digital advertising. The original process of purchasing advertising used elements like RFPs, negotiations, and manual orders. It used to be the case that people would have to make an agreement to run a certain number of ads with a publisher and stick to a contract. Programmatic Ad Buying allows for a far more efficient method, by using machines to buy ads in real time. This allows the automation of elements such as buying, placement, and optimization of the media inventory using a bidding system.


What Is Programmatic Advertising?

Programmatic is a way to target the specific audience you want to see your advertisements. Using aspects such as gender, age, and location you ensure you’re sending highly-targeted messages out to the right kind of people.

This is thought of as much better than campaigns that focus on the sheer volume of ads, rather than efficiently targeted campaigns. You can also decide which publishers you want your ads to show on, allowing you to pay only for effective ads that the right audience will see at the right time.


Why Do People Use Programmatic Advertising?

Human ad buyers and salespeople aren’t always reliable, and they can also be pretty expensive. Programmatic advertising provides an option that is superior in function and, as a result, more economical. A part of its efficiency comes down to removing the potential for human error. Assuming the appropriate algorithms have been set up correctly, this process can be followed to the letter. At present, the human element is still required for aspects such as optimizing campaigns and planning strategies.


Is There a Difference Between Programmatic Advertising And Real Time Bidding?

Real-time bidding is a type of programmatic ad buying, but it isn’t the only kind. RTB is essentially the buying of ads through real-time auctions. Programmatic software will allow advertisers to buy guaranteed ad impressions in advance from publisher sites. This method of buying is usually called programmatic direct.


What About Programmatic RTB (Real-Time Buying) and DSPs?

Programmatic RTB is different to PPC, as it’s used only for display advertising. It’s an automated way of dealing with media that’s bought and sold via technology platforms in real-time. The process of RTB is set so that publishers make the space available for brands and advertisers before bidding takes place.  RTB also comes into play when there are different variables to consider, like the types of people, price etc.

It’s also worth noting DSPs. A DSP is a Demand Side Platform. This is where an online system allows buyers of internet-based advertising inventory to trade, manage, and bid in real time for the cost of display ads. A DSP system also allows analysis of performance metrics, such as cost per click or cost per action. This allows for superior optimization of your ad campaigns, thanks to real-time bidding on ads and the ability to track your results accurately.

You can even obtain information about ad frequency, place ads in rich media formats, and in some cases, the system includes video tracking. DSPs are unique as they incorporate many of the same elements offered by advertising networks, such as wide access to inventory and vertical/lateral targeting. However, with DSPs, advertisers can truly maximise and control the impact that their ads have on their audience.


What Does Programmatic Look Like In Real Life?

You’re on the internet and you’re waiting the few milliseconds it takes for a page to load. This page will usually have space for an advert. Information that has been gathered about you based on your web behaviour and the context of the site is sent back and forth to an ad exchange. The ad is then placed on the page. The ad is auctioned to the highest bidder and it is their ad that is then shown in this space. This complicated process is all completed in the time it takes for a page to load, with absolutely no effect created on your user experience.


How Do You Know If An Ad Is Programmatic?

You can’t really ‘know’ for certain. If you feel an ad is targeted perfectly to you, and is seemingly designed for you to click on it, it’s probably programmatic. The opposite for this is are ads commonly referred to as ‘spray and pray display’. This is where advertisers simply rely on the volume of ads they put out and try to spread the message as far as possible. It’s worth considering that this strategy can be effective for brand awareness and ‘getting the word out’ but, being less specifically targeted, will almost certainly provide a lower conversion rate.


So, Does That Mean This is The Future Of Ad Buying?

Programmatic ad buying is on the rise, and this could very well mean it will be the future of ad buying. There’s no real way to tell what proportion of ads are purchased programmatically, however, the IAB has estimated that by 2018 money spent on programmatic advertising will have grown to more than 80%. This is compared to just 28% in 2013. Some brands say they want to buy as much as possible through programmatic buying, and some have even built up teams in-house to take care of it all for them. Mainly online ads are traded this way at the minute, but more and more companies are trying to find ways to sell traditional media in this manner, like TV spots.

Programmatic advertising could be a great way to target your audience more effectively with your advertisements and get more conversions in the process.


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