What Is Programmatic Advertising?
Programmatic advertising appeared in the late 1990s with the advent of ad networks and has since evolved with new opportunities opening up over time. Indeed, this model continues to grow. In Canada and the US, programmatic buying now accounts for close to 80% of online advertising and this percentage is only expected to increase in the years to come.
In this article, we will demystify programmatic advertising as well explore the possibilities it brings to internet advertising campaigns for commercial purposes.
Understanding programmatic advertising
Programmatic advertising refers to the entire process of purchasing advertising space by automated means. More specifically, programmatic marketing relies on ad marketplaces where advertisers purchase ad placements that have been put up for auction by web sites (or web publishers).
Prior to programmatic purchasing, ad placements were bought by advertisers after having contacting the websites where the advertisers wished to be seen. This process was lengthy and generally ineffective for accurate targeting.
Media buying has completely changed since the appearance of DSPs (demand side platforms) and SSPs (supply side platforms) which allow advertisers to contact publishers via ad exchange platforms. DSPs were initially managed by ad networks, but that is hardly ever the case anymore.
Within the programmatic display framework, advertisers set the parameters and budgets for an ad campaign on a DSP. The DSP then runs through the options for advertising spaces offered by an ad exchange platform (which is connected to several SSPs) while taking into account the advertiser’s defined parameters and the possibilities offered by the ad exchange. The entire process is automated and takes place almost instantaneously from the moment the parameters have been set up on the DSP by a web marketing expert.
The three types of programmatic advertising
There are three basic types of programmatic advertising:
RTB (Real Time Bidding) programmatic advertising is the most popular method of programmatic buying. Here, websites allow any buyer to participate in real-time auctions where they sell ad impression spaces. Publishers do retain some control, however, because they can set a minimum bid and maintain a blacklist of advertisers. In most cases, ad slots that have not been sold through the methods described below are auctioned through this medium. Still, some high quality spaces can also be sold via RTB.
Programmatic direct advertising differs from programmatic buying in that advertising displays are not sold by impression but by CPM (cost per thousand) blocks. In other words, a reserved inventory of ad spaces is bought at a fixed priced. Another difference is that advertisers and publishers are directly connected, so buyers and sellers are known to each other.
Exclusive auctions constitute the third type of programmatic advertising. Here, publishers choose the type of advertiser they wish to do business with. Once the choice of advertisers has been made, an auction session takes place among them by invitation. Of course, the entire process is automated.
You might think that all this automation eliminates the need for the human touch, but only a web marketing specialist can help you define the right targeting for your campaign as part of a coherent strategy. What’s more, a web marketing specialist has the knowledge and experience to continually and effectively adjust your campaign parameters in light of results.
At Index, our daily reality is lived at the heart of these developments and we believe in the success of the programmatic campaigns that we create for our clients using programmatic platforms such as Google Ads, Facebook Ads, Google Ads Display, and many more! Learn more about the online advertising services offered by Index now and feel free to contact us!