Understanding Programmatic Advertising And Its Advantages

Imagine that you create an amazing and exciting ad that you believe will deliver excellent results, but upon launch, the outcome is… underwhelming. This probably happened because you didn’t reach the right people or didn’t target them in the right way. Traditional advertising methods often rely on guesswork and assumptions, which can lead to inaccurate targeting and poor results. Programmatic advertising, on the other hand, offers a solution to this problem – which we will look further into in this article.

Programmatic advertising refers to the use of software and algorithms to buy and sell digital advertising space in real-time through an automated process. It involves the use of data, such as user behaviour and demographics, to help advertisers deliver highly targeted and relevant ads to specific audiences.

Programmatic advertising has grown in popularity due to its efficiency and effectiveness in reaching specific audiences at scale. It allows advertisers to bid on advertising space in real-time, which means that they can make decisions about which ads to display to which users, based on a range of factors, including the user’s browsing history, location, and demographics.

This way of buying advertising is available in numerous media channels, such as Display ads, Native ads, Video ads, Audio ads, DOOH and social ads.

There are several different types of programmatic advertising, including real-time bidding (RTB), programmatic direct, private marketplaces and preferred deals.

Real-time bidding (RTB) is a programmatic media buying method that allows advertisers to bid on ad inventory in real-time. It involves buying and selling ad space through an auction-like environment, where multiple advertisers bid on the same ad placement at the same time. The highest bidder gets to display their ad to the targeted user, and the process happens in real-time.

Programmatic direct is another type of programmatic media buying, which involves a direct relationship between the advertiser and the publisher. It uses software to automate the buying and selling of ad space without going through the open market. The direct relationship allows for better control over the ad placement and pricing, as both parties can negotiate and agree on the terms in advance.

Private marketplaces, also known as PMPs, are curated ad marketplaces that are only accessible to a select group of buyers. Advertisers can choose from a selection of ad inventory made available by publishers and negotiate the pricing and targeting terms with the publishers. PMPs offer a higher level of control and transparency, as advertisers can see exactly where their ads are being displayed and can be confident that their ads are displayed to a high-quality audience.

Preferred deals allow advertisers to select ad inventory at a fixed price before it’s available on private marketplaces and open auctions. This spot buying approach involves refined negotiation on pricing and targeting, with a sneak peek of the publisher’s inventory. Advertisers can use a DSP to assess their audience before deciding to purchase.

In conclusion, programmatic advertising has revolutionized the ad buying process by leveraging data and algorithms to identify and target specific audiences. This approach offers numerous benefits, including increased efficiency, precise targeting, real-time optimization, cost savings, and scalability.