Programmatic Advertising – The Basics

Programmatic Advertising, it’s a buzz word you will hear quite frequently in the advertising world if you venture close. It sounds very techy – but what does it mean exactly? Well the advertising industry is becoming more and more automated. Media buyers are now buying advertising time and space through digital platforms without having to deal with IO’s or any of the red tape that can come with media buying. Not only does programmatic make the process more efficent though, it also makes the ad itself more effective if the right data is being used.

When programmatic advertising first came on the scene it was viewed as a no brainer for direct response type campaigns. Now it’s becoming increasingly attractive to brand marketers and just about everyone else interested in effective advertising. Thanks to web cookies users can be shown an ad on their connected TV and then followed with ads on Facebook, Google, etc.

programatic-media-mixData Is Why It Works…

The best part about programmatic advertising is the vast access to data. Buyers can spread advertising across the web and then take a close look at the data to see what’s working best. What DMA’s, what times of day, which websites perform best, etc. etc. This is radically different from the old school version of media buying where you sign an IO for 3 months and that’s that.

Programmatic is effective and the proof is in the spend. It is currently the fastest-growing segment of online advertising. A lot of bigger brands now have entire in house teams dedicated solely to programmatic.

Issues With Mobile

Because programmatic works on cookies the jury is still out on mobile devices as cookies are ineffective in this world. However most brands are taking steps to tie mobile adveritisng into the mix in any way possible. The term “cross-platform” targeting is big in the industry and while it’s definitely possible some of the kinks are still being ironed out.

Due to the large amount of audience spending time on them, Social Media Networks have also become a worthwhile envorinment for finding your audience. In addition to this Facebook, Twitter and the like have been buying smaller networks (Instagram, Snapchat, etc.) and leveraging the vast amount of user data they can grab across multiple platforms.

Programmatic Advertising Fraud

While the technological advances that have enabled programmatic buying were geared towards transparency there is still a high possibility of fraud. Some web publishers will “mask” their URL pretending to be a larger more reputable site on an exchange. The incentive is to get advertising dollars that might not otherwise flow their way. At the end of the day the risk here is brand based. If a user on this site interacts with your ad, it’s still a win for you… just not in the venue you expected it to be in. This can however, be a problem when it comes to crunching data and evaluating performance if a site you think is is giving you the best conversion rate and it’s actually “Joe’s News Blog”.

The Long View

While a large portion of programmatic display inventory is “low quality” banner placements below the fold, in venues most people never visit online there are other controls in the programmatic arsenal that allow buyers to tighten control of what they are buying. Viewability has become a really big factor for advertisers and most programmatic platforms now have controls for purchasing ads that have high viewability ratings.

Programmatic media buying is performance media buying at it’s finest. A lot of the number crunching and optimization is done by machines so there is less room for error however it still takes a wise and knowledgeable media buyer to navigate the swamps of low value inventory and fraud to get the most bang for your marketing buck.
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