What is programmatic media buying, and how does it work?
In contrast to traditional (often manual) digital advertising techniques, programmatic advertising involves using automated technology for media buying (the process of purchasing advertising space). Programmatic media purchasing uses data insights and algorithms to show ads to the appropriate user at the right moment and at the right price.
Who uses programmatic? Display, mobile, video, and social are just a few digital platforms where one may find programmatic advertising.
Traditional offline outlets are also on the verge of being digital. Out-of-home channels are beginning to advertise programmatically on digital screens in bus stops, retail malls, and billboards.
Previously, programmatic campaigns were reserved for larger budgets and media agencies, but the rapid rise of self-service tools (such as Match2One) has opened up access to the technology for smaller brands, allowing them to compete with more prominent brands without having to go through expensive go-betweens.
Familiarise yourself with the terminology associated with programmatic media purchasing to comprehend the process better.
We can divide programmatic media buying into three categories:
- RTB (real-time bidding), also known as open auction, is when inventory values are determined in real-time through an auction. As the name says, this is available to any advertiser or publication. RTB is considered a cost-effective method of purchasing media with a big audience.
- Private Marketplaces (PMPs) are comparable to open auctions, except PMPs limit who can participate. PMPs are only accessible by invitation to a small group of marketers. Publishers may, however, have a selection procedure that permits marketers to request an invitation.
- When a publisher avoids auctions and sells media inventory to an advertiser at a set cost per thousand (CPM), this is known as programmatic direct (or multiple advertisers).
There are three essential components to the programming ecosystem:
- SSP (Sell-Side Platform): This software allows publishers to sell display, mobile, and video ad impressions in real-time to potential purchasers. This covers ad exchanges, networks, and demand-side platforms (DSPs) (see below). Publishers will have more control over their inventory and CPMs due to this.
- DSP (Demand-Side Platform): This software allows agencies and advertisers to acquire cross-platform ad inventory.
- The supply-side feeds inventory into the ad exchange through an ad exchanger. Advertisers, agencies, networks, and publishers can purchase and sell ad space through the DSP’s connection to the ad exchange. The bidding procedure can then be used to agree on inventory prices.
Ad inventory is often purchased in a real-time auction. Advertisers may buy per impression using programmatic channels, allowing them to target the correct audience. Because the process is automated, programmatic media purchasing ensures speed and efficiency that traditional media buying cannot match.
What is the significance of programmatic media buying?
The conventional media purchasing process is sluggish and inefficient since it entails a lot of manual effort, such as many requests for bids (RFPs), human discussions, and manual insertions of orders (IOs). Furthermore, advertisers have limited control over inventory and placement because advertising is purchased in bulk.
How can programmatic advertising help you succeed?
Here’s how you can get started on the right foot with programmatic advertising now that we’ve established its benefits:
1. Get to know your market.
The first tip is straightforward: do some study to figure out what’s involved. As a marketer entering into a new advertising sector, you’ll come across many new phrases and ideas, so take the time to learn them.
Become familiar with the programmatic advertising lexicon to learn how to distinguish between your SSP and your DSP.
2. Determine your programmatic advertising objectives.
Like with anything in digital marketing, it’s critical to have clear goals from the outset. To do so, you need to analyse current data to identify the sort of advertising awareness you require and devise a strategy that will assist you in determining short- and long-term objectives.
3. Keep an eye out for programmatic ad fraud.
Programmatic advertisements are typically viewed between 44 and 55 percent of the time, but eMarketer forecasts that fraud will cost digital marketers anywhere from $6.5 billion to $19 billion each year. Advertisers are concerned about consumer privacy, particularly on mobile and connected television (CTV).
So, how can your company combat fraud? The first step is to consider budget vs. reach. When it comes to programmatic advertising, marketers are preoccupied with reach, which may expose campaigns to bot misuse. If an offer seems too good to be true when bidding for ad space, it generally is! To prevent producing phoney traffic, don’t focus just on reach; instead, combine it with traffic quality.
Is Programmatic Advertising the Way of the Future?
Marketers may utilise programmatic advertising to better funnel messaging across targeted channels and maximise Share of Attention(R), as well as reach the most desirable markets and demographics and use data to discover new possibilities.
Programmatic delivers an environment where marketers can target their most important consumers more effectively than ever before, utilising digital media to achieve the greatest outcomes, thanks to automation and machine learning.
On the other hand, programmatic isn’t the future of advertising; it’s already here. If you’re not currently using it in some capacity, you’re missing out on the opportunity to save money and improve the results of your online advertising efforts.