Programmatic advertising in media buying
Programmatic advertising, defined as the automation of buying and selling digital inventory, at this time makes the majority of marketing investments in digital display advertising in Europe. According to the latest eMarketer data, this year’s programmatic advertising in France is 83.2%, in Germany 77% and in the UK 87% of total budget for digital display advertising. In the rest of western, northern, central and southern Europe, the shares range from 40 to 70%, and are slightly lower in southeastern Europe.
Ok, those are big numbers but how does it work?
Well I’m glad you asked. Let’s say that you have a web page that has advertising space configured. That advertising space can be filled by your sales team or directly from ad network. I will focus on ad network. So when user clicks on web site that has programmatic advertising slots configured, publisher puts up ad impression and an auction is held on ad marketplace. Then, the ad marketplace runs an auction between advertisers that are interested in displaying ad for that user. Advertiser with largest bid ultimately wins the auction and the ad is shown to user when the web page loads. It is an automated process that takes place in the time it takes for the web page to load. Max price that advertisers are willing to pay for impression is programmed in Ad network.
If we put that into steps is looks something like this:
Step 1: User clicks on webpage
Step 2: Publisher puts that ad impression for auction
Step 3: Ad marketplace holds auction between advertisers for impression
Step 4: Advertiser with highest bid wind the auction
Step 5: Ad is delivered to user
Step six would be if user clicks on the ad and makes a conversion. That is an ultimate goal.
But how is that different from buying advertising space directly form publisher?
In a situation where you have media on one side, and advertiser on the other side the process is straightforward. Advertiser contacts publisher that has usually most users and buys million impressions. Publisher is essentially running the campaign and measures results. So the advertiser is betting on the audience of that particular publisher and that web site.
Programmatic advertising on the other hand puts control in your hands, the advertiser. Advertiser manages and measures ad campaign on their own. Also you are not committing to one publisher or one web site. As I showed you in previous example, classic media buying has only 2 sides, publisher and advertiser. In Programmatic advertising there is middle man in the whole process, the Ad marketplace. You are also buying million impressions, but they are split across multiple publishers and targeted at a particular segment.
You are getting guaranteed impressions. Really, they are guaranteed. It is because the price is agreed between buyer and seller before that impression goes live. If there is a need to boost the message or reach new target audience advertisers bit for real time impressions.
Very interesting, so what are the benefits of Programmatic advertising?
Transparency
Everything is transparent — for the client, the agency and the publisher. Especially prices for agencies and how the money is used trough Programmatic platform.
Better Targeting
Programmatic advertising allows you number of targeting options — from demographic profiles to behavior patterns. By linking analytics or CRM platforms with programmatic platform and with dynamic optimization of ad message you can achieve tremendous progress in efficiency. Visibility of your ad is guaranteed ad also the possibility of ad fraud with fake impressions.
Relevance of the Ad inventory
You know exactly what you are buying, from who and where the purchased ad inventory is located. You know whether the user saw the ad and what interaction he had with your ad. This claims are supported by actual data publicly available on the market through certified and globally recognized applications like IAB.
Less time consuming
Direct buying of inventory requires a lot of interaction between client — agency — media. Programmatic creates preconditions that saved time is used for creating added value for user and everyone in involved.
Success and efficiency of the campaign
Programmatic advertising lets you to buy inventory, analyze and optimize your campaign in real-time. The ability to optimize significantly increases your campaign success.
So, what is the conclusion?
Well you get access to impressions available on publishers web sites all over the world. You have the ability to reach your audience on multiple websites, channels and platforms in the right time and efficiently.
Sources:
https://smartyads.com/blog/what-is-programmatic-advertising/
https://www.stateofdigital.com/what-is-programmatic-marketing-buying-and-advertising/
https://digitalmarketinginstitute.com/blog/2017-11-29-the-beginners-guide-to-programmatic-advertising
https://www.emarketer.com/topics/topic/programmatic-advertising
