Programmatic advertising is defined as the use of an automated online ad buying system, i.e. it is the type of advertising that offers users ads tailored to their tastes and needs. Now we'll tell you much more!
how does programmatic advertising work?
The purchase of programmatic advertising is carried out through an automatic procedure of buying/selling in auctions or bids in real time (called real time bidding or RTB) and the use of the well-known Big Data. In this process, advertising space is not bought as it would normally be done in the traditional way, but people are bought.
By means of the famous cookies, browsing data is collected that help companies to segment the audience and predict user 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 fairly 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 even geographic locations.
- 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 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 the ad impression.
-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 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 potential benefits of programmatic advertising?
- Great innovation for businesses, as it allows them to deliver much more targeted online advertising to the user for less cost and more profit.
- Greater segmentation: users can be easily segmented thanks to Big Data, which allows us to know specific data about their online behaviour.
- More reach: As an advertiser, the internet gives you access to a large advertising space on millions of websites at the same time, and you can also advertise on different media and channels in any geographic location, and, unlike traditional advertising, for a much 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.
- The ideal automation is achieved. 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 the different platforms that are responsible for distributing it across the network. This translates into simplifying the work and saving time.