Sujoyee Chatterjee Sujoyee Chatterjee
Sujoyee was the marketing specialist for Sigmoid. She specializes in Digital marketing, PR operations & content marketing domains.
Sujoyee Chatterjee
She worked as marketing specialist for Sigmoid.
Everything you need to know about Programmatic advertising

The word ‘programmatic has been used far too many times, without highlighting the significance given to the proceeding. In this blog, we’ll take you through the evolution of this journey to everything you need to know in Programmatic Buying & Selling.

Not very long ago, if you wanted to serve a display ad, you had to connect with a website (Publisher), negotiate a deal and sign an Insertion Order. However, this system was not targeted – there was no guarantee that majority of your audience visiting this particular publisher would be interested in your services.

But, with the advent of Programmatic Advertising – the process of buying display ad inventory has massively developed. Programmatic media or ad buying is the use of technology to automate and optimize the ad buying process in real-time. Brands and agencies can purchase ad inventory online in an automated way.

With the availability of the humongous amount of data to the online marketers, makes it possible to target audience with relevant ads that meet their needs & interests.

In a nutshell, let’s take an example of the use of ad networks like AdWords, backed by algorithms to serve highly targeted ads at visitors.

But Programmatic Advertising has matured vastly, not limiting itself only to search & display ads. Currently, it caters to more mediums like videos, and can be accessed across multiple channels both desktop & mobiles.

The term, Programmatic Advertising encompasses all the other crucial terms which you’ll often stumble across in this space like ad-exchanges, Demand Side platforms (DSP’s), Supply Side Platform (SSP’s), exchange-based buying of ad inventory, real-time bidding (RTB), and ad networks to serve targeted content across various mediums to audiences.

The performance & productivity benefits from Programmatic Advertising is rapidly increasing. In US, two thirds of all digital display advertising is 2016 is expected to be conducted via Programmatic advertising.

The performance & productivity benefits from Programmatic Advertising is rapidly increasing. In US, two thirds of all digital display advertising is 2016 is expected to be conducted via Programmatic advertising.

Major Constituents of Programmatic Ad Environment

  • Real Time Bidding (RTB)

RTB is a buying method, that powers bulk of the transactions in the process. With RTB, a buyer can set parameters such as bid price and network reach. The RTB standard is defined, and is maintained by Interactive Advertising Bureau (IAB).two thirds of all digital display advertising is 2016 is expected to be conducted via Programmatic advertising.

  • Programmatic Direct

This is a buying method also known as ‘automated guaranteed’ that enables advertisers to buy a fixed number of impressions in a guaranteed fashion directly from publishers, without an auction.

  • Demand Side Platform (DSP)

This is a platform which automated the buying of ad inventory from Ad Exchanges, either by RTB or Programmatic Direct methods. DSPs (Demand side platforms) facilitate the process of ad inventory buying in an open market, and help you target the right audience due to integration of Data Management platforms.

  • Ad-Exchanges (DSP)

This is the largest pool of available ad spots (inventory), where an advertiser can make a quick purchase without having to go through various publishers. Ad-Exchanges run auctions for these inventories from various publishers one impression at a time. There are thousands of ad exchanges, however the most popular ones are Google Ad Exchange, AppNexus and Facebook Exchange.

  • Supply Side Platform (SSP)

SSPs(Supply side platform) manages the publisher’s unsold ad-inventory. It also collects data like duration of a visitor on a website & their navigation paths. These platforms are the decision makers for choosing the winning bid & serving the winner’s ad on the publisher’s site.

  • Data Management Platform (DMP)

Data Management Platforms (DMPs) store & analyze a large amount of data (generated in form of cookies) which a marketer can use to make more insightful decisions regarding their target audience.

Programmatic Buying, helps marketing professionals define budgets, goals & attribution model, while the platform will quickly readjust various variables in real time, to determine the correct campaign settings to achieve the targeted ROI.

You can also either run a targeted buying campaign (based on customer characteristics, to create a user pool interested in your brand) or you can create a more targeted pool with previous visitors to your website.

A few metrics, that one needs to grasp before entering the Programmatic game are CPM, CTR, etc. It’s important to understand these metrics, because they’ll define your output.

  • Cost per Thousand (CPM) is an ad model, it charges an advertisers each time his ad is displayed to a user, irrespective of whether the user clicks it or not. The fee is based on every 1,000 ad impressions.
  • Click-through Rate (CTR) is the rate (%) at which users will click on an ad.

The benefits of Programmatic Advertising can be summed up broadly in four categories.

  • Automated Buying

With higher efficiency, and well equipped algorithms, machines have fully replaced humans in the future of advertising.

  • Smarter Targeting

You can ensure that the ads are displayed to the targeted audience, across multiple channels who carry an intent to purchase your product. You also have access to premium inventory, which would otherwise be inaccessible.

  • Cost Efficiency

This process is definitely more cost efficient than directly sold inventory. If the regular auction process doesn’t work out, you always have an option to switch to a Private MarketPlace(PMP) deals.

  • Scale

Your ad will be presented across thousands of publishers in various formats like display, video, social, mobile and native.

Programmatic Buying is becoming more and more sophisticated. It is safe to say, that Programmatic Advertising will eventually hold the dominant market share of online display ad industry. New opportunities are giving rise, to new advertising strategies encompassing social networks like Facebook, with the addition of RTB. Programmatic Advertising, is undoubtedly the future of advertising.

We equip you with an analytical tool, which makes your Programmatic Advertising journey much easier. If you’re interested to know how, you can take a look at these real time use-cases or you can directly contact us to know more.

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