Programmatic advertising is the use of an automated online ad buying system. In other words, it is defined as an advertising buying model that consists of offering users ads adapted to their tastes and needs at the right time, thanks to the use of new technologies. Now we will tell you much more.
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 that user behaviour can be predicted.
what types of programmatic buying exist in media?
Unlike the traditional media buying process, programmatic advertising does not necessarily involve advertisers and publishers working one-to-one to serve ads. Ad serving depends on the type of programmatic deal chosen. Different types of programmatic deals dictate the rules when serving ads on publishers' websites. Here are the key programmatic deals:
-Real-time bidding (RTB) - Also known as open auction or open market, real-time bidding (RTB) has become synonymous with programmatic media buying primarily because of its widespread use. Ad 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 ad 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 bidding: In preferred bidding, advertisers can choose ad inventory at a fixed price even before it becomes 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 to buy ad impressions.
-Guaranteed programmatic - Guaranteed programmatic, also known as direct programmatic or automated guaranteed, follows the traditional media buying approach. Here, the advertiser and publisher negotiate terms on a one-to-one basis. Guaranteed programmatic gives advertisers choice in terms of ad inventory, pricing, audience targeting and frequency capping.
what are the benefits of programmatic advertising?
- Great innovation for businesses.
- It allows more targeted online advertising to be delivered to the user for less cost and more profit.
- Segmentation: We can segment users thanks to big data, which allows us to know specific data about their online behaviour. Thanks to this information we can reach our target audience. Likewise, segmentation will not only make it easier for you to show your advert, but it also helps to improve communication between the company and the user.
- Reach: It is obvious that the internet allows us to reach any user in the world who is on the net. As an advertiser, the internet gives you access to a large advertising space on thousands of websites at the same time. Likewise, you can do it in different media and channels in any geographical location. And unlike traditional advertising, for a more affordable price.
- Better rates: The use of targeting, algorithms and the ability to make changes in real time increases the conversion rate per click, as programmatic advertising gives you higher quality traffic, because remember, you are where your customer is.
- Automation: Programmatic advertising, like many processes within digital marketing, is done in an automated way. Once you create your ad or ads and you have the whole process done, it is already through different platforms that are responsible for distributing it across the network. This translates into simplifying the work and saving time.
what are the disadvantages of programmatic advertising?
- It has a higher cost than display advertising because impressions are more expensive.
- Although targeting through algorithms is effective, it is not always positive, resulting in your ad being shown on undesirable sites.
Finally, remember the advantages of programmatic advertising to get started with it.