Programmatic advertising is past the point of being a fad or the latest industry buzzword. Every day new articles are published about programmatic media budgets increasing as a percent of total digital spend and how marketers are treating it not as an individual channel, but as a way to execute media buys across different channels. For this reason, anybody who has their hand in digital advertising/media needs to have a solid understanding of programmatic.

Great, so what is it?

Programmatic media buying/advertising/marketing is the buying and selling of inventory using software that automates much of the work that was manually done in the past.

Ok, give me an example

One of the most common examples is the buying and selling of a display ad using RTB (real-time bidding). A publisher can make an impression available in an ad exchange, which is a digital marketplace where advertisers using buying platforms DSPs, (Demand Side Platforms) can look at the available impression and all associated data with it –

  • On what website is the impression?
  • Has the user visited the advertiser site in the past 30 days?
  • Is the user a female aged 18-34?
  • What size ad can be served in the ad slot?
  • Is the ad slot above or below the fold?
  • What type of content is on the page?

And then decide if and how much they would like to pay for that impression. The advertiser with the highest bid wins, and their ad is ‘served’ in the ad slot.

So RTB and programmatic advertising are the same thing?

Not exactly. A lot of programmatic advertising is bought in an RTB auction like the one described above, but not all. If a buyer and a seller negotiate terms (like quantity and price of inventory) beforehand, they can then use the programmatic platforms to execute the buy, which eliminates much of the operational work that would be needed without the programmatic platforms.

Why is programmatic growing so much?

The major reasons are efficiency, transparency, and targeting.

Programmatic increases efficiency because often the impressions are less expensive than if they were bought through an ad network or directly from the publisher. Buying platforms also have algorithms that can improve campaign KPI performance over time.

Any advertiser that has direct access to the buying platform can pull detailed reporting to look where the ads ran, what time of day, what browser, what type of people saw the ads, and much more. This isn’t always possible when buying through ad networks or other methods.

The last reason is targeting capabilities. Buyers can layer on as little or as much targeting data that they like, including first-party audience data, third-party audience data, contextual signals, location targeting, and much more.

Got it. So when I run a campaign in Facebook Ads Manager or the Google Display Network, it’s programmatic advertising?

Kind of, but not really.  Using these platforms enables you to set up targeting and set up bids much like what was described above, but the major difference is that in these platforms you only get access to one inventory source, which is the same company that runs the buying platform (Google for AdWords and Facebook for Facebook). With other DSPs, you can buy inventory from many different sources. When people are referring to programmatic, they aren’t referring to buying ads through Adwords or Facebook Ad Manager.

Ok that makes sense. Where can I learn more and get started with programmatic buying?

Adexchanger.com is the leading source of news regarding programmatic. You can also contact admin@knight.global for a consultation on the best way to get started with your brand.

 

 

Summary
Article Name
Programmatic Advertising Basics
Description
Anybody who has their hand in digital advertising/media needs to have a solid understanding of programmatic advertising
Author
Publisher Name
Knight Global
Publisher Logo