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Programmatic Advertising – The Buzz Words on Everyone’s Lips

Last week we talked about real-time bidding, how it works and what the advantages are. Following on from understanding RTB is Programmatic Advertising (PA). It may seem like thing that everyone is talking about PA but it’s been around in theory for a couple of years. It’s growing in popularity and more New Zealand businesses are putting marketing budget into it.

The chances are you’ve heard the words being thrown around recently at seminars, in forums and by online marketers; but what is it?

What is it exactly?

Programmatic Advertising or Programmatic Ad Buying is the automated process of buying and selling digital advertising inventory through an online exchange. An ad exchange is a software or technology that facilitates this buying and selling process of media advertising inventory through multiple online networks. These exchanges connect advertisers (website owners, web masters that want to buy ad space and marketers) to advertisers (web masters that have ad space to sell and media networks). Programmatic Advertising process uses software, artificial intelligence (hence Programs) and real-time bidding instead of humans to buy and sell inventory across desktop, mobile, display, video and social channels.

Key:
Ad exchange/s. These are platforms where ad campaigns can be setup and inventory bought or sold. Some examples are DoubleClick, Adtech, App Nexus, OpenX, Rubicon and PubMatic.
DMP – Data Management Platforms. These collect and store internet user data in one central database. Some examples are Adobe Audience Manager, Blue Kai, X Plus One and Core Audience.
DSP – Demand Side Platforms. These enable marketers to bid on and buy ads from ad exchanges. Some examples are DoubleClick, Rocketfuel, MediaMath, App Nexus and Marin Software (mentioned below).
SSP – Supply Side Platforms. These enable publishers to offer inventory for sale through the ad exchanges. Some examples are Right Media, OpenX, Rubicon Project and PubMatic.

Graphic from Marin Software.

Why is it growing in popularity?

The main reason why people are excited by PA is that it’s efficient. Before this new process in ad buying, online ad space was bought and sold by humans who can be unreliable and expensive. This new technology provides the makes the system more efficient and often more affective because it’s run through a program and not through people. People get sick, have coffee breaks and make mistakes. Because of that, it’s also often cheaper.

So more robots replacing humans then ey?

While PA may mean less work for some media buyers, the software is being used to replace some of the more menial tasks that people had to look after. Marketers are still required to plan strategies and optimise campaigns.

How is it different to real-time bidding?

RTB is a type of programmatic ad buying, but it’s just a facet of it. RTB is the buying and selling online a space s via real-time auctions, but programmatic software also allows advertisers to obtain guaranteed ad impressions in advance from specific publisher sites of their choice. The similarity is that like the RTB technologies, the programs used for PA use algorithms to analyse a visitors behaviour prior to visiting a website, which means that advertisers can have their ads appear for a relevant user that’s likely to convert. Programmatic companies can gather audience data from their own or third-party databases to make this even more precise.

Is PA the way of the future?

It’s very hard to know what percentage of ad buying is still done by humans and what is now PA but it’s quite clear that it’s growing. Currently it’s mainly used for online media, but there’s talk that clever people are trying to come up with ways of using it in other more traditional forms of advertising, such as print and TV. Want to know more about using PA for your business? Give us a call on 0800 878 833.

Glossary
Inventory/ Advertising/ Ad/ Media Inventory: For the purposes of online marketing, ‘inventory’ usually refers to space available for purchase on digital streams – such as online newspapers and magazines, websites, social media sites and other platforms. This may be banner ads, video content or other.