Advances in information and communication technology have impacted the advertising industry in ways that have changed the face of regular advertising. Technology-driven advertising techniques now exist to ensure that advertisers target audiences with specificity. Among such tech-based developments is programmatic advertising.
What is Programmatic Advertising?
Programmatic display advertising is a kind of advertising that makes it possible for advertisers to place online display advertisements in front of potential customers while they are browsing websites where the advertisement is displayed. This is made possible by a technology structured for programmatic display. One basic unique thing about programmatic is that potential customers can be targeted on specific demographics such as their age bracket, salary, interests, job role, and their current internet browsing interest. Adverts can be placed at specific times of the day or on specific sites when these target users are online. This is a major influence of technology on advertising in the digital era.
Programmatic advertising is a way to automatically buy and optimise digital campaigns, rather than buying directly from publishers. This advertising approach is designed to replace human negotiations with machine learning and AI-optimisation. The goal is to increase efficiency and transparency to both the advertiser and the publisher. This is done through real-time auctions where ads are bought at the same as a visitor loads a website (match2one).
Programmatic advertising automated advertising. It consists of real-time buying and selling of advertising inventory through an automated bidding system. This technology-driven advertising approach enables brands or agencies to purchase ad impressions on publisher sites or apps through a sophisticated ecosystem. Programmatic advertising includes ad slots for digital out-of-home (DOOH), online, streaming, TV, video and voice ads. This is a growing advertising approach used in this digital era by those that understand how it works.
Types of Programmatic Advertising
Martechadvertiser.com provides four basic kinds of programmatic advertising as follows;
1. Real-Time Bidding (RTB)
Also known as open auction or open marketplace, real-time bidding (RTB) has become synonymous to programmatic media buying primarily because of its widespread usage.
The ad slots are open to everyone in RTB, and they’re sold through an open auction type of bidding. The highest bidder gets the spot. The whole process takes place in real-time, and advertisers can choose ad slots as they are made available.
2. Private Marketplace (PMP)
The private marketplace functions in similar veins as RTB except for the fact that it is available to advertisers on an invite-only basis. In private or closed auction, publishers usually set aside a premium ad inventory reserved only for select advertisers. Many DSPs have their own PMPs that are accessible exclusively to the DSP users/customers.
3. Preferred Deals
In preferred deals, advertisers get to choose the ad inventory at a fixed price even before it is made available on private marketplaces followed by on open auctions.
Also known as spot buying, the negotiation in preferred deals takes a refined approach as both the parties agree on the pricing, targeting, etc. beforehand.
The advertiser is given a sneak peek of the publisher’s ad inventory and is not bound to make any purchase. Advertisers can use a DSP to understand their audience and determine whether to purchase the ad impression.
4. Programmatic Guaranteed
Programmatic guaranteed, also known as programmatic direct or automated guaranteed, follows the traditional approach of media buying. Here, the advertiser and publisher negotiate the terms on a one-on-one basis.
Unlike other media buying types discussed earlier, programmatic direct doesn’t follow a bidding process. The inventory is sold directly to the advertiser after the negotiation. Programmatic guaranteed provides advertisers the ability to choose when it comes to ad inventories, prices, audience targeting, and frequency capping. Automated guaranteed is used by advertisers that know precisely where to place their ads and have hefty advertising budgets.
Advertisers are looking ways to specifically target potential audience members in order not to waste advertising budget without making impact. Programmatic advertising provides a tech-based way of ensuring advertising goals are achieved with visible profits to an organization.