The Power of Programmatic Advertising: Programmatic 101

The Power of Programmatic Advertising: Programmatic 101
Danyelle Horrillo
The Power of Programmatic Advertising: Programmatic 101

We’ve talked about WHY programmatic is essential to your marketing strategy, but now let’s talk about what exactly it is.

When digital ads first made their appearance in 1994, the only way to buy media and place ads was to work one-on-one with publishers. Buyers would collect information such as rate type, minimum spend, and demographics of site traffic to determine if a site or group of sites reached enough of their target audience to justify a media buy. This process was very manual and as more inventory became available, advertisers needed new technology to help streamline the buying and placing of ads. And websites/publishers needed more efficient ways to ensure that their inventory was selling.

The digital ad landscape looks much different today, now it’s advertisers, publishers and technology working together, in (mostly)blissful harmony!

Programmatic means automated. In its simplest form, programmatic advertising is the automated buying and selling of digital advertising. It’s a philosophy where advertisers focus on finding the right audience in the right format, instead of focusing solely on the right website. Programmatic advertising utilizes automation, advanced targeting techniques and machine learning to create opportunities for advertisers to strategically place ads and follow the end consumer across their open web and in-app online experience.

Ready for some acronyms?

Hold on to your pixels, because we’re diving in a bit deeper here to go through the programmatic landscape!

All buying for programmatic campaigns takes place in a DSP, or Demand Side Platform. Within a DSP there are a plethora of targeting options. These can feel endless, and are the who, how, when, where, and how much, of a media buy. Targeting options include - but are not limited to -Geography, Device, Demographic, Contextual, etc. To access certain targeting types, including behavioral, and 1st party client audiences, DSPs will integrate with DMPs, or Data Management Platforms. DMPs are the technology platforms that make 1st and 3rd party audience targeting available for use within the DSP.

Ad Exchanges connect DSPs to SSPs (supply side platforms) where Real Time Bidding occurs. Real Time Bidding refers to the buying and selling of online ad impressions through real-time auctions. RTB is part of the programmatic advertising process, but not all programmatic advertising uses RTB. Think of this as the auction house of the programmatic world.

All of these details are important in order to understand the flow of a programmatic media buy. Ready?!

Details of an ad buy are placed into a DSP, the DSP works through ad exchanges to find users that match the specified targeting criteria, on publishers’ websites. If an end user is identified, the DSP will make a ‘bid’ on that user, and if won, that specific ad will show! 

There are a lot more complexities that go into the programmatic landscape, which we will discuss in the future, but for the time being- the above descriptions and details will work perfectly!

Types of targeting

There are almost endless ways to target utilizing programmatic!

Targeting consumers utilizing first & third-party data

First party data is audiences that your company has collected directly from their website, email list, or any owned/earned media that can then be utilized for targeting. These include CRM, look alike, retargeting, search retargeting, or users who complete an action on site. Third party data is collected by outside sources (publishers, companies, etc.) and sold to other companies for targeting utilization.

What types of Media can be run programmatically?

In reality, almost anything!

Video:  CTV (connected TV) OTT (over the top TV-think streaming on a tablet here) Digital Online Video (Pre-roll, Mid-roll, Post-roll)

Display: Desktop, Mobile, Native, In-app, open web

Digital Audio: In-app, open web

New programmatic opportunities are popping up all the time because technology is constantly evolving. In fact, there are now programmatic opportunities for purchasing terrestrial radio!

In future articles we will dive into what all of this means at a deeper level. I’ll go through topics such as how to set campaigns up for success with measurable KPIs, levels of data and insights, and inventory providers, just to name a few.  If you’re interested in hearing more about these topics, please make sure to follow along!