In this vast era of the digital world, programmatic advertising is a hot and trending topic. Thought leaders, marketers, advertisers, and business owners praise the benefits of programmatic advertising and why it can be a catalyst for revitalizing the industry. However, many people are still confused about programmatic advertising, even if it has evolved from a fashion to a long-term strategy. If you also have many questions, fortunately, you have come to the right place.
This article takes you through the basics of programmatic advertising and contains all the information you need to know about how it works and how to use it. We have also compiled valuable guides on programmatic marketing concepts to help you quickly start this pioneering digital marketing strategy for entrepreneurs.
What is Programmatic Advertising?
The basic concept remains the same, whether it’s programmatic advertising, marketing, media buying, or programmatic advertising buying. Programmatic advertising refers to the automatic purchase of digital advertising through the use of dedicated software.
The purchase of advertising traditionally requires individuals to perform several steps, including ad proposals, quotations and negotiation. On the other hand, programmatic buying methods use the efficiency of machine learning and algorithms to reserve online advertising space.
Moreover, it should be emphasized that this does not mean that the acquisition of advertising spots is entirely automated. On the other hand, programmatic buying aims to simplify the process by giving marketers more time and freedom to develop and optimize their ads. This is because people will always be interested in their progress as advertising is for human audiences.
Furthermore, it is essential to remember that programmatic advertising is still in its infancy and offers many opportunities for growth and expansion. Nevertheless, it has proven to be a very effective and powerful online marketing tool.
Types of Programmatic Marketing
Is buying programmatic advertising the same as real-time bidding? This is one of many common questions about programmable technology. Although the two names are often used interchangeably, this is not entirely correct. There are many types of programmatic advertising, and one of those is Real-time bidding (RTB).
To better understand how programmatic advertising works, you first need to be familiar with the three main categories it usually falls into:
Real-time Bidding (RTB)
Real-time bidding allows you to buy advertising space through real-time digital auctions. RTB is commonly referred to as an open auction. It uses real-time auctions to determine the cost of advertising inventory. Any publisher or advertiser can participate in RTB. For individuals looking to purchase online advertising with a large audience, RTB may be a flexible and comparatively cheaper option.
Private Market Place (PMP)
Although the structure of private markets is similar to RTB, they are subjected to membership restrictions. It can only be accessed by invitation. In some cases, marketers or advertisers have to apply for PMP, and if they are selected to participate, they are given membership. Although auctions are common, additional labour is required for the preparation work because the terms of sale are agreed in advance.
Those people who do not want to participate in the auction do not choose programmatic direct. In this type of programmatic advertising, the publisher provides advertising inventory to the advertiser at a fixed cost per mile (CPM). Programmatic Direct is most commonly used for high-quality advertising resources, such as full-page acquisition advertising.
How does Programmatic Advertising Work?
There are three essential parts of the programmatic advertising ecosystem, and all of them plays a vital role in the whole process.
Sell-side Platform (SSP)
Publishers can use SSP software to sell real-time ad impressions (for display ads, mobile ads, and video ads). Through SSP, publishers can better control their ad inventory and cost-per-thousand-impressions (CPM). This component includes advertising networks, exchange platforms, and demand-side platforms (DSP), which we will discuss next. SSP is a tool widely used by publishers and vendors.
Demand-side Platform (DSP)
DSP enables marketers, advertisers and agencies to purchase advertising inventory across multiple programmatic advertising networks. The primary users of DSP are advertisers, brands and agencies.
Although Google Ads is technically a DSP, its advertising resources are limited to the Google Display Network. Some display ads, such as those seen on Facebook, are within the scope of Google. However, if you only use Google’s advertising network as your DSP, you will not be able to advertise on Facebook.
The ad exchange is the step where the supply and demand sides meet. Here, both the publishers and suppliers send ad inventory to Ad Exchange through a supply-side platform (SSP), and this supply-side platform (SSP) is connected to a demand-side platform (DSP) at the other end. Then, DSP enables media agencies, companies, and advertisers to obtain digital advertising space. Ultimately, the bidding process determines the price of certain commodities.
To better understand, interpret the Ad Exchange as a trending stock of the stock exchange, with the difference being that it buys and sells digital display advertisements instead of supplies. This is the moment when the planned ecosystem comes to a standstill.
The most common way to buy advertising inventory is real-time bidding. Advertisers can use programmatic channels to target specific audiences more effectively because they can pay for ad impressions. Automation improves the efficiency of the process and goes far beyond the possibilities of traditional media purchases.
Today’s era is the best time to use programmatic advertising campaigns to help you achieve your marketing goals. The flexibility of this strategic technical tool will only increase in the future. If you haven’t already, now is the time to implement programmatic ad buying.
Moreover, qualified professionals must create, manage, and improve your programmatic display campaigns and overall strategy. Skilled digital marketers can make full use of programmatic advertising techniques and get the best results for their efforts. Therefore, you should only use programmatic ads for now. DIGILEAP MARKETING SERVICES.