What is Programmatic Advertising?

Posted on 28 Jun 2018   |   Filed under Marketing, Advertising

What is Programmatic Advertising?

By Jenny Clarke

But what exactly is it and how can you make the most of the new technology?

Put simply, programmatic advertising is the automated process of buying and selling digital media space. The process is carried out by software that uses algorithms to ensure your advert is seen by the most appropriate market, at the right time and the right number of times, at the right budget.

Programmatic advertising started out as the digital way to use up ‘remnant inventory,’ (or ad space that hadn’t been purchased), but now the advancement of the technology means that it is a far more sophisticated tool and is rapidly becoming the best way to buy digital ad space.

The capabilities of programmatic are constantly evolving to become more and more sophisticated and are starting to reach beyond simple online ads into video, digital out-of-home, streaming, voice and TV, meaning that it can work harder than ever before, and yet needs a thorough understanding to really maximise the benefits.

How does it work?

The best way to think about it is that there is the ad space buyer on one side using the ‘demand side’ platform (DSP), the seller on the other using the ‘supply side’ platform (SSP) and a broker, which is the software, in the middle which matches up the two sides in real time.

A price is pre-agreed by the buyer and seller before the impressions go live on the website. If and when the brand needs to amplify the message, or reach a different audience beyond the standard campaign, then marketers can bid for real-time impressions.

What are the benefits?

The real benefit of programmatic advertising speaks to the very heart of traditional marketing: it enables you to specifically target the audience for your digital advertising across demographic segments such as age, gender, social standing, and location. You can also choose which publishers show your adverts in addition to stipulating the frequency, days of the week, and time of day the advert appears.
In short you maximise the effectiveness of your ads, ensuring they are delivered to the right people at the right time, making them work harder for you.
Another main difference from traditional ad buying where a buyer is locked in to the contract agreeing to run, say, a million impressions with one publisher is that programmatic advertising allows the advertiser the flexibilty to buy those million impressions across a range of media.
In addition, unlike traditional ways of buying digital ad space which leave the publisher running the campaign, programmatic gives the control to manage and measure back to the advertiser. Because it is an automated system results can be seen quickly, and you can test what is working and change anything which isn’t

How to do it

As with all marketing practices, the place to start is to gain a clear understanding of your target market, using behavioural insights from data. This data can be from your existing customers or that gathered by your agencies or bought in.

Use this understanding to drill down into the audience you need to reach, and how best to reach them - what kind of day, at what scale and increasingly on what devices. Use the data to examine what is known about them behaviourally and demographically based on the individual’s internet consumption habits over time.

Depending on what you are aiming to achieve you can target existing customers (retargeting) by selling them an upgrade or new products. You can also use data to find new prospects based on your existing customers profiles which is known as ‘lookalike modelling.’

With a larger campaign the accuracy of who you target may be diluted, but with a smaller campaign the accuracy can be very tight. The good news is that with programmatic advertising it’s possible to get the right balance for the campaign you are running.

In addition to understanding what you need from your campaign you also need to know specifics about the process. For example it’s increasingly important to understand the language used by the buyers and sellers within programmatic advertising which is very jargon-heavy and has a vocabulary of its own.
The use of acronyms such as DSP (demand-side platform) and SSP (supply-side platform), along with DMP (data management platform) and API (application programme interface), can make programmatic seem overcomplicated.

Programmatic marketing can add some complexity to a rounded marketing programme, but as a cost-effective and ROI-driven approach to digital advertising, programmatic technology is well worth the effort in the long-run.

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