Programmatic advertising is the use of an automated online ad buying system. In other words, it is a type of advertising that can offer users advertisements tailored to their needs. Now we tell you how it works, what its main characteristics are and what types exist. Don't miss out and read on!
how exactly does programmatic advertising work?
The purchase of programmatic advertising is done through an automatic procedure of buying/selling in auctions or bids in real time (real time bidding or RTB) and the use of big data. In this process you do not buy advertising space as you do in the traditional way, but you buy people. In other words, you pay for your ad to be shown wherever you want and only to your real target audience. This makes programmatic advertising a smart way of advertising online, as you also show yourself to potential customers at the right time and place.
Programmatic advertising works through algorithms, or in other words, through the famous cookies that collect browsing data that help companies to segment the audience. All browsing data is stored, so you can predict their behaviour.
what are the main features of programmatic advertising?
- Improved targeting: many different data points and KPIs can be used to target an audience, making it much easier to reach the right one.
- Quick access to inventory: within the programmatic advertising ecosystem, buyers and sellers connect efficiently with each other.
- You save time: programmatic ad buying aims to eliminate the human element as much as possible, which means less time spent making deals and/or negotiating specific price points.
- Greater reach: With programmatic advertising you can reach potential customers around the world by placing ads across multiple ad networks, partners, channels, social networks and geographic locations.
- Targeting: You can segment users thanks to big data, as we have told you before, which allows you to know specific data about their online behaviour. With this information we can reach our target audience and, likewise, targeting will not only make it easier for you to show your ad, but it also helps you to have a better communication between company and user.
- It allows you to go further in personalisation: with programmatic advertising you can create different versions of the same ad that respond to different user characteristics, achieving maximum personalisation.
what types of programmatic buying exist in the media?
-Real-time bidding (RTB)- Also known as open auction or open market, real-time bidding (RTB) has become synonymous with programmatic media buying mainly due to its widespread use. Advertising space is open to all in RTB and is sold through a type of open auction. The highest bidder gets the spot. The entire process takes place in real time and advertisers can choose advertising space as it becomes available.
-Private Marketplace (PMP): The private marketplace works similarly to RTB, except that it is available to advertisers by invitation only. In private or closed auctions, publishers typically reserve premium ad inventory reserved only for selected advertisers. Many DSPs have their own PMPs that are accessible exclusively to DSP users/clients.
-Preferred deals. In preferred deals, advertisers can choose ad inventory at a fixed price even before it is available in private markets and then in open auctions. Also known as spot buying, negotiating preferred deals takes a refined approach, as both parties agree on price, targeting, etc. in advance. In addition, the advertiser receives an advance on the publisher's ad inventory and is not obligated to make any purchase. Advertisers can use a DSP to understand their audience and determine whether they should buy impression from it.
-Guaranteed programmatic - Guaranteed programmatic, also known as direct programmatic or automated guaranteed programmatic, follows the traditional media buying approach. Here, the advertiser and publisher negotiate terms one-on-one. Guaranteed programmatic gives advertisers choice in terms of ad inventory, pricing, audience targeting and frequency capping.
Finally, remember that programmatic advertising is part of Inbound Marketing and by implementing it you will be helping your brand, your business or your company to grow quickly and efficiently. Thank you very much for reading us!