Programmatic advertising for dummies
Programmatic advertising is one of the modern directions of marketing. It is based on the automation of an ad purchasing process. Thus, the cooperation of publishers and advertisers becomes much easier. Any marketer, whether a beginner or an advanced player, should understand the essence of programmatic and be able to apply it in the marketing strategy.
What is programmatic?
Programmatic is an advantageous thing for both advertisers and publishers. On the one hand, it allows selling remnant and high-quality advert inventory at competitive prices. On the other hand, it gives advertisers an opportunity to target their audience on a more advanced level.
Programmatic advertising is the application of special software, which works on the basis of computerized algorithms. Thus, human involvement in the process of ad buying and placement becomes much lesser. Today programmatic is mostly connected with digital advert purchasing (online and mobile advertising). However, the specialists of the industry keep developing the technology in order to make it possible to buy/sell traditional advert inventory including TV, radio or print media.
Types of programmatic
There exist two main ways of the application of a programmatic approach:
- programmatic direct
- RTB system.
Programmatic direct presupposes partial automation. It means that marketers still need to directly negotiate with each other on the issues of prices, targeting, and other options or conditions of a deal. Only after this, the process becomes automated. It mostly concerns the delivery of the advert and its placement on the publisher’s resource.
Real-time bidding is the most popular variation of the programmatic approach application. It presupposes the deals, which are made in real time through online auctions. The following sides are involved in the process:
- supply-side platform
- demand-side platform
- ad exchange.
Advertisers use a demand-side platform in order to manage their advertising materials, select targeting options, and finally access an advert exchange. Publishers use a supply-side platform for the advanced control of their advert inventory. Such a platform allows them setting minimal prices and making their ad space available to advertisers on advert exchanges.
Another participant of the real-time bidding system is an advert exchange. It is a third-party resource, which plays the role of a platform for the cooperation of publishers and advertisers. Having access to a wide range of advertising networks (which are linked to several sites with the vacant ad space), they provide their users with great opportunities. There are various types of ad exchanges. There might be open marketplaces, which are available to anyone. There are also private platforms, which are organized by a definite publisher or a group of publishers in order to provide the security of brand name and other important information as well as to make sure that only reliable advertisers can access their ad inventory. Private marketplaces usually have stricter requirements.
Sometimes it is hard to understand, whether you see a normal advert or a programmatic one. The key lies in targeting. If you see the materials, which correspond to your interest, browsing history, location or any other specific features, the advert is likely to be programmatic.
Benefits of programmatic
Every programmatic media buyer and seller can enjoy lots of benefits guaranteed by the technology:
- transparency (as the whole process or at least a part of it is computerized)
- low investments (compared to the traditional way of advert purchasing, you need less staff to hire for the cooperation and deals making)
- time saving (you spend less time on negotiations and orders delivery)
- low risks of fraud.
Another important benefit is greater opportunities for the control of either advert inventory or ad placement. Advertisers can target exactly the desired audience placing various types of ads on reliable resources with a large number of visitors. Moreover, the ad will be shown only to your target audience. It is also possible to manage the advert campaign monitoring its results via a DSP. At the same time, publishers can be sure that their visitors will never see inappropriate advert materials or ads, which disturb their experience on the website.