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The ABCs of Programmatic Advertising

Updated on July 25, 2016

Programmatic Advertising Solution

With an uncountable number of brands flooding the market and each trying to differentiate, companies have begun to realize the importance of advertising programmatically. They now understand only a few will survive in the long run; and that is who are able to strike that perfect balance between superior products and excellent engagement.

As we march into the digital era, human interaction, communication, and negotiation take a backseat. Such is the case with the online advertising industry. It has steadily begun its journey towards automation and advertisers are now easily buying ad spaces on websites without a trace of human interaction. Today, artificial intelligence has made it possible to skim through zillions of ad requests and place the most appropriate advertisements on the website as soon as the page loads; all this in a matter of milliseconds!

So what is the grumble on programmatic advertising all about? What makes it so special that spending on real-time bidding has reached almost 60 percent in 2016 to make it the fastest growing chunk in the digital advertising world?

What is programmatic advertising?

Programmatic advertising is automated buying and selling of digital ads like banners, desktop displays, mobile ads, and videos using real-time bidding. To put it even more simply, programmatic advertising is nothing but using highly advanced software to buy digital advertising space. Whenever a user clicks for a website, advertisers instantly have the opportunity to bid against competing publishers based on consumer profiles. The winning bid or advertisement is then displayed on the page. The computerized process of selecting the ads for display means that the long-drawn processes of lengthy RFPs, negotiations, and manual insertions are eliminated altogether. This type of advertising helps in expediting the decision making process by achieving the desired results through targeting the right audiences from your targeted location.

How does programmatic advertising deliver to business?

Artificial intelligence technologies have algorithms built into them that analyze visitor behavior. It implies having the capacity to gauge whether there is a probability for the user to convert into a buyer. This allows for real-time campaign optimization for users who can generate revenues.

Programmatic advertising includes the use of DSPs, SSPs, and DMPs. DSPs or demand side platforms facilitate the process of buying ad inventory in the open market and help in targeting customers. DMPs or data management platforms collect and analyze cookies to allow publishers to make informed decisions for their target audiences.

On the other hand, publishers manage their unsold ad inventories through an SSP (supply side platform). An SSP shares reports on bounce rates, most popular pages, page views, etc. SSPs also help choose the winning bid and ad that will go up on the website.

Why you should you go for programming advertising:

  1. Targeting: Programmatic advertising helps to target customers with more efficiency. The technology is continually gathering data based on the type of individuals that engage with the brand. This information is collated to come up with effective marketing strategies to target potential revenue generators.
  2. Cost effective: The most important factor for choosing a marketing channel is the cost-benefit ratio. The process of bidding enables publishers to pay a fair price for each impression. They can do away with the non-performing ads and focus on those that create conversions, thus allowing for better inventory management.
  3. Speed, scalability and effectiveness: By removing human interruptions, programmatic advertising makes the entire process of media buying swifter, streamlined, and seamless. Publishers can spread their ad inventories across a wider range of publishers, reach an exhaustive list of touch points, remove ads that are not doing well, and allocate bigger budgets to the ones that are.

The future is here

Programmatic advertising takes fragmented data and uses it to make significant business decisions like ad placement, customer targeting, marketing strategies and much more. Programmatic ad technology deals in near real-time data, allowing marketers to be customer oriented and reactive to market changes. That’s what makes it the technology to look out for. It won’t be long before we see this ad technology over taking TVs and even OOHs entirely.

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