Programmatic Advertising: What It Is and What Benefits It Offers to Business
Marketing technologies are rapidly developing, and one of the key promotion tools is programmatic advertising. This automated process of buying and placing advertising allows businesses to effectively interact with the target audience in real time. Using AI algorithms in programmatic advertising makes this process even more accurate, minimizing costs and increasing the effectiveness of advertising campaigns. In this article, we will analyze what programmatic advertising is, how it works, and what benefits it gives to businesses.
What is Programmatic Advertising And Why Is It Needed?
Programmatic advertising is a model for buying, selling, and optimizing advertising. First of all, when it comes to programmatic, people talk about media advertising on the Internet, in other words, about videos and banners. The ideology of programmatic advertising is that the advertiser buys not just impressions on some site, but buys impressions of the desired target audience. Programmatic allows you to automate the process of placing media advertising on a huge number of sites, allows you to control these processes within your own ecosystem, and delivers the right message to the right user at the right time.
How Does Programmatic Advertising Work?
On the one hand, there is an advertiser, on the other hand, there is a publisher, with whom the advertiser wants to place their ads. The publisher, of course, has its own audience, to whom these ads will be shown. So, the advertiser and the publisher have their own tools in the programmatic system.
The main tool of the publisher is the supply side platform or SSP. These platforms have a number of optimization tools that allow you to sell the site’s traffic with maximum benefit.
The second platform in the programmatic advertising system for the publisher is the so-called Ad Networks, they combine places for placement on sites and compare them with the requirements of advertisers.
Let’s move on to advertisers. The main tool of the advertiser is the DSP (Demand Site Platforms). The task of the DSP is to buy the most targeted traffic at the lowest price. The second tool for advertisers is ATD (Agency Trading Desk) – an advertising office where the advertiser sets up the parameters for purchasing their advertising.
Among the main advantages of programmatic advertising:
- High speed of launching and regulating all processes;
- Reduced costs for advertising campaigns;
- Transparent purchases, control over the purchased format and audience;
- Convenient interface and display of statistics in a single window;
- With the help of an open auction, it is possible to purchase traffic from premium sites, the cost of which in direct purchases is significantly higher;
- The ability to purchase the best places on various sites through private transactions.
Programmatic Marketing
Publisher offers and advertiser requests meet on the ad-exchange, where all the magic of big data analysis happens: users are analyzed by many factors (interests, age, location, etc.), and the most relevant platform for displaying ads is selected, satisfying the advertiser’s conditions.
It seems clear. The advertiser sets up his impressions, optimizes his campaigns, and the publisher his their traffic, but where does the data come from? It’s simple. If we talk about the Internet, these are browser cookies and device cookies. As for offline, these are data from special video analytics cameras with human recognition, which are installed at points of sale. As the amount of data grows, there is a need for their complex processing.
The task of DMP (data management platforms) is to process a huge amount of data about the audience, segment this audience, and sell all this data in programmatic. They earn money by receiving a commission from each ad impression that uses data from the DMP.
How Can You Buy Programmatic Advertising?
Programmatic advertising purchases are divided into two types:
- RTB auction.
This is a real-time auction where advertisers bid for publishers’ offers. The auction can be either open or closed. In an open auction, each advertiser has access to inventory and bids with other advertisers; a closed auction is a specific tool when the platform itself selects a group of advertisers that bid for the inventory offered by the platform.
- Programmatic direct.
This is a direct placement with a specific publisher. In turn, programmatic direct is divided into two types: free for deals – deals with a fixed price, but without guarantees of impression volume and programmatic guarantees – a deal with a fixed price and a guarantee of impression volume. Here it should be clarified that guaranteed programmatic is the only format of deals where the advertiser does not target his audience, that is, he simply buys the number of impressions from a specific platform.
The main advantages of programmatic advertising are that a huge amount of data is aggregated in one place, and a huge number of channels can be managed with minimal resources. There is also an additional advantage in the form of brand safety. This is the case when the content of a brand is not shown on certain sites that are not suitable for some reason.
Programmatic advertising is a highly effective method of creating truly good advertising campaigns based on careful targeting settings. Targeting allows you to work with segments of a special target audience, warming them up to purchase by placing automated advertising. Programmatic advertising systems provide tangible conversion and eliminate excessive negotiations between publishers. Experts predict a significant increase in the share of programmatic advertising in the overall flow.
Final Thoughts
Programmatic advertising opens up new horizons for businesses, allowing them to automate the purchase of advertising space, personalize ads, and increase conversion. Thanks to AI-based algorithms in programmatic advertising, advertising campaigns become more accurate, and marketers get the opportunity to analyze huge amounts of data to improve promotion strategies. Intelligent algorithms reduce budget losses and make advertising more effective, providing brands with a competitive advantage. Implementing programmatic advertising is a step into the future that helps companies achieve their goals faster and at a lower cost. If you are looking for a reliable provider of programmatic advertising services, we recommend paying attention to SmartyAds.
