If you work in advertising or know anything about media buying, you will probably have heard of programmatic media buying or programmatic advertising. It’s a term that gets thrown around a lot without many people actually having an in-depth understanding of what it’s all about. It’s time that you learned about the meaning and the practices behind the buzzword. Read on now if you want to do exactly that.


What is Programmatic Media Buying?

 

To put it simply, programmatic media buying is when technology is used to automate and optimize online ad buying. The process can be long and complicated, not to mention repetitive when you try to do it manually and without the use of technology. A simple example of programmatic advertising is AdWords. It uses algorithms, not humans, to get results for the businesses that use it.


Targeting Specific Individuals

 

Having already mentioned AdWords, it’s vital to discuss targeting. These days, businesses want to target specific groups and people and demographics with their adverts. They don’t just want to throw them out there in front of lots of people because many of them won’t have any interest in what’s being offered. Targeting customers is so much easier when programmatic advertising is used. Highly targeted adverts can be put in front of the individuals most likely to be interested in buying what your company has to offer.


Programmatic Direct

 

There are two main types of programmatic media buying; the first of them is programmatic direct. This form of ad buying does not use auctions. Instead, as the name suggests, it’s a direct ad buying process. This is when an inventory is guaranteed or reserved, so the buyer of the ad space and the publisher fix all of the terms in advance. This refers to both the price of CPM as well as the scale of the inventory. There are no real-time auction purchases involved at any stage.


Programmatic RTB

Programmatic RTB is the more common and more widely-used method of media buying out there at the moment. RTB stands for real-time bidding. A demand-side platform is used to bid for advertising that can be used by the company wanting to place adverts online. The publisher is attracted to this kind of arrangement because it allows them to sell remnant inventory. But this is now changing as premium inventory is being sold on these platforms too. It’s all automated and is done very quickly.


Why does programmatic buying or advertising matter?


Programmatic media buying matters because it offers several advantages over traditional advertising. For example, it is more transparent and open than other forms of media buying solutions. It levels the playing field while helping advertisers reach their target audience in no time at all. It is also very cost-effective for advertisers, meaning they can save money at the same time as improving their advertising setup. Most importantly, It is something that is currently on the rise, and many people believe that programmatic media buying is the future of all online advertising.


According to a joint study by the Interactive Advertising Bureau (IAB) and Winterburry Group, more than 85% of advertisers and 72% of publishers across the digital marketing industry are embracing programmatic or automated ad buying, and this is set to increase in the future.


  1. Here are six major benefits programmatic advertising offers to marketers and advertisers.

Improved efficiency

Automated ad buying has greatly improved the efficiency of digital advertising, which is possible due to several factors. For starters, it eliminates the requirement for long-drawn negotiations and Request for Proposal (RFPs) between advertisers and agencies which would otherwise cost both time and money. The use of artificial intelligence and algorithms makes the process of placing ads a lot simpler and efficient. The ability to measure the performance of campaigns in real-time also helps advertisers in making the necessary changes to their campaigns, which improves the efficiency of the campaigns.


Real-time data and insights

As mentioned above, programmatic provides advertisers real-time data and insights into how their ads, creatives, and campaigns are performing. With programmatic marketing, advertisers don’t need to wait till the end of the campaign to make changes but can obtain data as soon as the campaign is launched. They can see where their ads are being displayed, how much engagement the campaign is receiving and other important insights. They can also measure, analyze and optimize their ads and campaigns in real-time so that the campaigns perform better.


Flexibility

Programmatic marketing offers advertisers great flexibility for customizing their ad campaigns. Advertisers can decide how they want to place their ads as well as their budget. For example, they can choose to either pay only for the relevant impression that they actually receive or sign up for a minimum budget. Programmatic ad buying also enables to opt for a minimum number of impressions as well as ad inventory across publishers. Advertisers also have the option of optimizing their campaigns mid-way based on views, clicks, and conversions from the campaigns. 


Better targeting

Programmatic advertising uses extensive data and algorithms that allow advertisers to place targeted ads with high precision and accuracy. It allows marketers and advertisers to target audience based on a number of factors such as the audience geolocation, age, behavior, search terms, categories and site visits or even IP addresses. It also allows them to retarget customers after the site visitors have visited the advertiser’s site, which helps in better conversions.


Wider reach

Programmatic allows marketers and advertisers to reach out to a wider spectrum of target audience across multiple platforms and multiple publisher websites at a lower cost when compared to traditional forms of display advertising. Not only this, but marketers are also able to track the campaign’s reach. They can find out how many people have looked at the ad, where the audience was located, the demography of the audience, time of the day they saw the ad and much more. 


Time for strategy development

This can be considered as an indirect advantage of using programmatic advertising. As programmatic eliminates the necessity for manual RFPs and long-drawn negotiations due to automation, the process of buying and selling of ads becomes less time-consuming and streamlined. This, in turn, gives the marketing and sales teams more time to develop and test their strategies as well as sales programs for their biggest assets.


In short, more advertisers and marketers are realizing the benefits of programmatic advertisements and hence rapidly adopting this technology to improve the efficiency of their ads and campaigns. No doubt that it does have a few challenges. However, partnering with the right solution partner and platform who has a strong technology expertise and can offer strong support can help advertisers stay ahead of the curve.

Want to know which are some of the top programmatic ad platforms available in the market today? Click here.



Originally published , updated March 15 2018