Programmatic Buying
By: Claire Mcquithy
Tags: Digital Marketing, Advertising, Programmatic

Programmatic Buying

Simplifying your media planning and buying one DSP and real-time bid at a time

The process of programmatic buying has been on the rise in the last few years in an effort to create efficiencies in the planning and buying process. In this article, we’ll discuss the buzzword and learn the value it can add to your buying strategy.

Programmatic buying leverages technology and sophisticated algorithms to create an automated system of media buying. It takes place on demand-side platforms, or DSPs, that give agencies and advertisers direct access to publishers and networks available through media exchanges, giving them full control over all details of the media plan without the need to work through a sales team. Media sold programmatically through a DSP allows advertisers to dynamically place ads in front of a highly targeted audience at the right time.

How it Works

Inventory is made available through a DSP powered by algorithms. Once the advertising objective is outlined, agencies or advertisers bid in real-time on media based on a set of defined targeting parameters — a key value in programmatic buying. When someone lands on a page within the targeted parameters, a bid enters the auction. Through a series of algorithms, bids are matched with the appropriate publishers. Once a bid is accepted, the ad is delivered to the intended audience within a matter of milliseconds. In a nutshell, ads are delivered to a highly qualified audience at the right time: once a user within the target audience lands on a site within the programmatic network, the advertiser’s ad appears.

Buying an Audience, Not an Ad

Buying media programmatically offers immense value in terms of targeting. Advertisers have the ability to hand-pick and hyper-target specific users through first-party advertiser data or third-party targets through non-identifiable cookie data. Given the breadth of cookie data used to inform third-party targets, this allows for a multitude of data points to create custom audiences that best fit advertiser needs. Targets can range from standard demographic and geographic detail, down to topical targets such as news or sports, and interest targets including vacationing, online shopping, or investing assets, to name a few.

Advertisers have complete control over the content where ads are placed, including the ability to align with specific content and to blacklist content that is topically sensitive or irrelevant to the campaign.

Quality Inventory is Readily Available

Programmatic buying offers the ability to control when an advertiser’s ads are seen and where. Advertisers can exercise creative freedom with the use of banner ads and high-impact units — and it goes well beyond desktop display. DSP partnerships offer advertisers the ability to purchase mobile, social, video, and even television inventory programmatically.

You Choose the Cost

There are two ways to purchase inventory on a programmatic buy, with guaranteed impressions on a flat CPM or CPC, or through a bid process commonly known as real-time bidding or RTB. RTB, a common practice in programmatic buying, means that each ad is priced individually. Advertisers place a bid, and only ever pay one penny higher than the next highest bidder to win auctions.

The advantage of purchasing media programmatically is that advertisers are in control of bidding and spending at all times, with the ability to maximize cost efficiency and shift budgets at any time based on campaign performance.

Rich Source of Campaign Data and Insights

Agencies and advertisers own all campaign management around programmatic buys and can use data and learnings to inform decisions on the advertiser’s digital ecosystem in real time. The ability to optimize based on KPIs and cost metrics adds tremendous value to advertisers, creating a highly efficient environment to test, learn, and evolve media campaigns to drive the most direct impact on the bottom line — whether that be awareness, lead generation, or conversions.

Why Programmatic?

Programmatic buying has become a widely accepted discipline as it relates to buying media, and many publisher networks are changing their business models to allow agencies/advertisers to buy inventory programmatically. Some common programmatic platforms leveraged by advertisers are Facebook, Google Display and Google Search, and DSPs such as Turn, Conversant, and RocketFuel. Many publishers are also making inventory available on DSPs for direct programmatic buying including Pandora, CNN, and Amazon, to name a few.

Programmatic buying will continue to grow as technology gets smarter, driving success for advertisers through hyper-targeted reach at highly efficient costs, and resulting in a robust set of data to inform the evolution of media campaigns moving forward.