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Programmatic Buying Definition

Programmatic ad buying is the use of software to buy digital advertising. While the traditional method includes requests for proposals, tenders, quotes, and negotiation, programmatic buying uses algorithmic software to buy and sell online display space.

programmatic buying definition


Programmatic advertising is a powerful tool and global spend in 2020 topped $129 billion and is expected to surpass $150 billion in 2021. The United States is the biggest spender on programmatic ads, but the UK and China are catching up fast.

Now, with programmatic advertising, you can rely on an algorithm that will determine where your ad money is best spent. All you have to do is feed your programmatic solution information about your campaign, audience, and key performance indicators, and the algorithm will do the hard work!

Typically, programmatic ads are viewable between 44% and 55%, but eMarketer estimates fraud will cost digital advertisers from $6.5 billion to $19 billion each year. Consumer privacy is also an issue for advertisers especially on mobile and Connected TV (CTV).

So how can your business deal with fraud? The first thing to do is look at budget vs. reach. Marketers have been fixated on reach when it comes to programmatic advertising which can leave campaigns open to abuse through bots. If a deal looks too good to be true when bidding for ad space, then it probably is! Try not to fixate on reach but couple it with traffic quality to avoid generating fake traffic.

Hotel group IHG, the parent company that owns the Holiday Inn and Intercontinental chains, began running programmatic ads to encourage users to book directly with them, rather than with third-party sites like Expedia or

Working in close collaboration with Google using display and Video 360, Audi took a data-driven approach that combined all customer data rather than relying on siloed information. That way, by using programmatic techniques the marketing team could optimize its most valuable consumer touchpoints.

In addition to capturing behavioral data for improved marketing segmentation, the brand offered users the chance to customize their dream car online from a choice of 6,000 possible combinations. These individual designs were then used to create personalized dynamic ads that resulted in double the efficiency of standard ads. While buying programmatic ads resulted in a conversion rate four times higher than ads bought through traditional methods.

Programmatic advertising is the use of automated technology for media buying, as opposed to traditional (often manual) methods of digital advertising. Programmatic media buying utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price.

Ad inventory is usually bought via a real-time auction. Using programmatic channels, advertisers can buy per impression, thereby targeting the right audience. Since the process is automated, programmatic media buying guarantees speed and efficiency that is not matched in the traditional media buying.

The traditional media buying process involves a lot of manual work, typically with several requests for proposals (RFPs), human negotiations and manual insertions of the orders (IOs), which makes it slow and inefficient. Additionally, ads are purchased in bulk and advertisers have little control over the inventory and placement.

Programmatic advertising is the use of automated technology for media buying (the process of buying advertising space), as opposed to traditional (often manual) methods of digital advertising. Programmatic media buying utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price.

Programmatic advertising is the process of automating the buying and selling of ad inventory in real-time through an automated bidding system. Programmatic advertising enables brands or agencies to purchase ad impressions on publisher sites or apps within milliseconds through a sophisticated ecosystem.

Programmatic advertising has become one of the most preferred ways of running ad campaigns. But, the AdTechOpens a new window space is complex, and a lot of mystery surrounds programmatic advertising. Marketers are still unsure about the concept of programmatic advertising and its ecosystem. We aim to clear all this confusion in this primer.

Programmatic advertising is the real-time buying and selling of ad inventory through an automated bidding system. Programmatic advertising enables brands or agencies to purchase ad impressions on publisher sites or apps through a sophisticated ecosystem. Programmatic advertising includes ad slots for digital out-of-home (DOOH), online, streaming, TV, video and voice ads.

Advertisers use a DSP to facilitate the process of ad buying and a DMP to utilize third-party user data (brands can merge first- and third-party data to strengthen targeting capabilities). Publishers use an SSP to manage their ad inventories. SSPs take the final call on deciding which ads to serve depending on the bids.

Contrary to the traditional media buying process, programmatic advertising may not necessarily involve advertisers and publishers working on a one-on-one basis to serve ads. The ad delivery depends on the type of programmatic deal chosen.

Programmatic guaranteed, also known as programmatic direct or automated guaranteed, follows the traditional approach of media buying. Here, the advertiser and publisher negotiate the terms on a one-on-one basis.

Advertisers and publishers work with display networks such as Google, Microsoft, or Snapchat to facilitate the buying and selling of ad slots. Publishers generate revenue based on the clicks and impressions data collected by the display network.

The popularity of programmatic ads continues to grow as video continues to become one of the most preferred mediums of content consumption. Digital video ad spend in the US alone is predicted to grow up to $22.18 billion in 2021.

Programmatic audio platforms rely on real-time audience data to place ads and utilize engaging display and video ads to optimize the user experience. Streaming apps serve companion ads that are often programmatic display ads, while ad pods are the audio equivalent of video ads.

Although measurement and attribution are still challenging in programmatic DOOH due to its nascency, advertisers can run targeted and highly engaging retargeting due to its features such as geofencing.

As programmatic advertising provides advertisers with real-time campaign performance, they can invest their budget in avenues that will get them the best results. This efficient investment allows them to spend their campaign budget effectively and yield better ROI.

The transparency offered by programmatic advertising platformsOpens a new window enables advertisers to evaluate each publisher in real-time based on the performance of their ads and choose those who deliver justifiable results.

RTB, is just one type of programmatic advertising. While static auctions for online ad space involve the purchase of thousands of impressions upfront, RTB enables bidding for individual ad impressions, which makes it much more focused than bulk ad buying.

Programmatic advertising gives advertisers and publishers real-time access to data about ad placements and activity, which helps to maximize transparency. The next step is achieving transparency in programmatic costs, which is a key issue facing the industry.

Programmatic ad buying gives advertisers access to a massive ad inventory across multiple ad exchanges and networks with a click of the mouse, including premium inventory and private marketplaces with high-quality traffic. With programmatic, advertisers can make sure to maximize the relevancy of their ads for specific targeted audiences and improve ROAS.

When it comes to programmatic, the future is already here. Programmatic advertising spend is increasing every year, and the remarkable growth extends beyond display ads to native advertising, mobile advertising and video advertising. By 2023, programmatic video advertising spend in the US is forecast to reach close to $75 billion.

Programmatic advertising works on a CPM (Cost Per Mille), or Cost Per Impression, model. CPM is the price per 1000 ad impressions that appear on a website. Programmatic ads CPM is usually believed to cost somewhere between $0.50 and $2. Certainly, programmatic CPM is far cheaper than other platforms, such as social media networks where CPM can go as high as an average $6-$7.

Although programmatic spend is on the up and up, for many digital marketers, lack of understanding of the way programmatic advertising works is a huge hindrance. As the use of programmatic ad tech overtakes the traditional advertising model, the importance of building strong advertiser-publisher relationships is declining and the need to gain technical knowledge of programmatic technology increases. 041b061a72

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