A single definition wouldn’t do justice in explaining programmatic advertising. It must be broken into layers and explained each layer in detail. In specific, it is the way of buying and selling of ad inventory using technology. This blog is all about it, information on programmatic advertising in the simplest way possible.
If you remember the history of Internet evolution, you would have noticed the difference in buying ad spaces online then and now. However, some of the basics remains the same. For example, the usage and the relationship of the terms; buyers and sellers. A buyer is the person who advertises, and seller is the publisher of the ad. When buyer’s intention is to reach the targeted audience by various ways such as creating brand awareness or providing information to influence the prospects to buy their products or services; the goal of the publisher is to build the best intriguing web property to feature these ads in the most entertaining and useful ways.
Sometime later in the scene came the middlemen or the so-called agencies/media planners who connects the buyers with the sellers in the best possible way. Later, the internet growth was on supersonic speed, resulting in an enormous amount of unsold ad spaces. Then in this ecosystem emerged a new team of people called as Ad networks.
What these people did was to find, segregate and inform the media planners on unsold ad spaces. Well, the process of selling and buying became truly complex with arrival of ad networks resulting in the emergence of 2 new terms: Premium ad inventories and Remnant ad inventories. Premium ad inventories are sold in a direct way i.e., advertisers approach the publishers for the ad space. Whereas remnant ad inventories are unsold or leftover ad space identified by ad networks and they sell it to the advertisers. As ad networks have now the most power with multiple ways to access ad inventories, publishers wanted to have a body to regulate, manage and foresee on who is gaining access to the inventories. That is how SSP or Supply Side Platform was formed. SSP helps publishers to maximize their revenues for their ad inventories. A bidding environment is created By SSP for selling to ad networks.
On the other end of the spectrum, DSP came into prominence to help agencies and buyers. DSP is the infrastructure that helps agencies, buyers and ad networks to manage their media buying on a single platform. Much later to the progressive steps came RTB or Real-time bidding where a single platform is created for buying and selling, assisting everybody involved in this ecosystem. Automations and data-driven techniques lead to a programmatic way of buying and selling the digital media. Thus, programmatic advertising came into the existence.
Definition Of Programmatic Advertising
Programmatic advertising is the automated selling and buying process of ad spaces online. Inventory on programmatic platforms are unending. Any type of ad spaces for any format is available on these platforms. Some of the most popular programmatic advertisement platforms are AdRoll, Adobe Marketing Cloud, DoubleClick, Choozle, AdReady and Centro. These platforms would probably outdate the age-old practices of buying and selling ads through human negotiations, manual insertion orders and request for proposals. Automation has brought in so much clarity into an otherwise chaotic scenario where unreliability prevailed and make the system more effective, efficient and cheaper. As the process is totally automated human interference is reduced. That means no fluctuations in the price, no bribing, no erroneous transactions, authenticity and trustworthiness.
Advantages Of Programmatic Advertising
- It is faster because all the processes are technologically programmed, and long tasks involved in the buying and selling processes are reduced.
- Transparency and control are improved as it offers layers of protection. The buyers get clear visibility into what sites their advertisements are getting published, a thorough understanding about the people who are checking out the ads at the other end and cost comparisons can also be known in real time.
- Measuring the performance has become super easy with programmatic advertising. In the previous era, with traditional media such as billboards, print advertisement, digital advertisement, etc, one had to wait for the campaign to get over to understand the reach, success or the failure of the advertisements. Now this is not the case. Real-time reporting and data measurements is accessible in all the programmatic advertisement platforms. Nobody must wait until the end of the campaign period to get the results.
- As programmatic advertisement platforms show accurate data, there is no chance of wasting money. One can buy or sell ad spaces on the correct budget they have decided on. This indicates that all the ads will be running efficiently and on budget helping all kinds of businesses, find their ad spaces without any hassle.
- Huge audience reach is another promising feature of programmatic advertising. According to 2019 reports there are approximately. 4.39 billion internet users available online and it is not easy to narrow down and show the exact reach by using traditional methods. With programmatic advertising, this becomes super easy. Impressions can be seen instantaneously, location of the people who checked out the advertising can be traced, the device they used to look at the advertising can be tracked, the responses made by viewers can be analysed and so much more can be done on these platforms.
Programmatic Advertising Trends
- In Zenith’s ‘Programmatic Marketing Forecast’ report, it is stated that ad spend will reach $98 billion by 2020, as sure shot indication on how businesses are shifting from traditional ways of advertisement buying and selling to modern platforms. This change is catalysed more by the arrival of Artificial Intelligence (AI), 5G and Machine Learning (ML).
- New age digital planning involves use of high-end technology, tools and platforms. Here is an example of AI in Programmatic Buying environment. IBM’s AI based bot Watson is now quite famous in the UK and US, it helps in reducing Cost Per Click (CPC) by 71%. Adoption of AI in programmatic advertising is ever increasing.
- Gartner predicts that in 2020, 30% of web-browsing would be done by voice. Programmatic advertising platforms gives an opportunity to buyers to sell their advertisements in home smart devices and in-store & on-app audio devices.
- Concept of personalization is ever evolving. Programmatic adtech can deliver messages in an ultra-targeted way with the help of AI based predictive modelling.
- The way people watch TV has changed drastically. The paradigm shift of viewers from the traditional connected TV to OTT has created a rising need for advertisers to buy spaces in the new formats like Netflix and Amazon Prime. Programmatic advertising platforms help people to buy spaces in podcasts and all other newer formats.
It wouldn’t be apt if you talk about all the positive aspects of programmatic advertising and leave out the negative points. The experts suggest that bot fraud can cause huge loss for businesses, well this year alone $6.5 billion loss is reported. Also, ad blockers are being used widely because people are now aware of their personal data usage by advertisers to stalk them across the internet. From the buyers’ point of view, programmatic advertising platforms makes online digital advertising easy; so it is better to close the eyes to the minor negative aspects of it.