Programmatic advertising, complexity untangled Promotion

You have a party that’s just around the corner and as usual you make the claim of having nothing to wear. You resort to Google; checking out some latest styles in the hope of buying something fancy. It could be a style blog you stumbled upon that prompted you to click. However, this click is apparently not just a click. It’s a siren going off in the search engine that is taken as an affirmation of your interest that results in displaying ads of similar products. This is programmatic advertising.

This is a typical story of a digitally active consumer and programmatic ads. So is this what all the current buzz is about in the marketing industry? Evolution of advertising over the years has seen a paradigm shift with the advent of online media. In the past, the challenges were to get prime spots be it on billboard, print ads or television. It was painful to simply choose between channels and reach frequency within the available budget. Times have changed and technology at its peak making digital marketing an easy task and programmatic advertising even easier. Let’s explore what all the fuss is with programmatic advertising!

The Evolution

Evolution of AdvertisingLooking at the history of online advertising, it’s fascinating to see the transformation of online advertising. It started with email marketing in 1978 by a digital equipment marketer Mr. Thuerk to around 400 recipients. This gave rise to the concept of spam for people who never expected and wished to receive a promotional communication.

It was so simple, but with recent technology, the ad tech industry has matured to a new level along with increased connectivity. Ubiquitous smartphones have not only made the world smaller for people but also reduced the distance between marketers and target audience. Each and every customer is targeted individually with intuitive data analytics by studying their online behaviours and providing them with relevant advertising communications at the right time.

Programmatic Advertising

Programmatic ads, sounds fancy and quite complicated! It is nothing but the software based ad technology which automates the whole or part of the advertising process. One of the ways of automated process makes use of Open marketplace Real Time Bidding (RTB) for exchanging the ad space inventory through an exchange for a value across various channels like mobile, social media, display ads etc. Other types of programmatic advertising are Private market place, guaranteed, direct, etc. Playing a vital role in media buying and precise targeting of the audience, programmatic advertising stands to provide efficiency in optimised ad spending and resource utilization.

Process

Programmatic marketing uses platforms like DSP (Demand Side Platforms), DMPs (Data Management Platforms), SSPs (Supply Side Platforms) and other support systems like Ad exchanges, Publishers, Ad servers and trading desks. As the figure shows the flow of process and data in the system, let us understand each component’s function.

Programmatic advertising Infographic

What is what?

  • Publishers own the ad inventory of websites and hence serves as the front end platform where the advertisements are delivered. From small specialized websites to large multifaceted websites, publishers have got a variety of ad inventories to cater to diverse audiences through suitable channels.
  • Ad servers are the channel through which digital ads are stored and distributed among appropriate publishers made possible with simple coding. This helps to utilise a number of publishers for ad publishing and tracking ad performance.
  • When a marketer has a DSP to help buy the ad inventory, publishers have their counterpart called Supply Side Platforms (SSPs) to help them sell their inventory to appropriate buyers through the ad exchanges.
  • Ad exchange is like a market where the marketers and the publishers meet virtually and exchange their inventory and the ads for a value. All of the exchanges happen through a bidding process considering costs and the attributes of the place, users, etc., to fit with the right options.
  • Advertisers and agencies bank upon Demand Side Platforms (DSPs) to purchase millions of targeted ad impressions with the help of data analytics for their digital advertising. This takes into account User behaviour, Psychographics, Demographics and available budget to run the show.
  • Trading platforms or Trading desks are the agency based platforms that enables agencies to cater to their clients on the needs of programmatic media buying with improved accuracy and efficiency.
  • Contemporary marketing is nothing without data. In programmatic advertising, Data Management Platforms (DMPs) help the marketers in terms of receiving, storing, analysing and providing insights on the trends of a particular campaign, for instance. In the whole process, data is generated at each and every step, which gets stored in the DMP and can be analysed.

What’s next?

Programmatic technology and algorithms have chiselled out routine manual tasks like micromanaging publishers for improving the relevancy of order, ad insertion order, etc., which in turn resulted in more resources and time for the creative side.

Rise of technology has been changing and influencing how we are living our life. Each and every day holds surprises in terms of technological advancements like mobility, Internet of Things and not to mention programmatic advertising for marketers. Make hay while the sun shines. It’s time to experiment with your advertising strategy on programmatic ads and benefit from the potential cost and time savings it offers.

Great days ahead!

Related Articles:

Shoot right on target with real-time bidding

Real-time Bidding vs Programmatic Advertising. Are they the same?

Types of programmatic advertising, a bird’s eye view

Automated guaranteed, relationship automated

Private marketplaces, invitation-only!


Comments

  1. Myles Rose Says: August 31, 2016 at 4:03 pm

    Nice work here. Note that a DMP can use your in-house data to target/suppress audiences and find new audiences using 3rd party data across all your tech stack.
    A DMP will also allow you to drive creative efficiency through dynamic creative optimization in ads and on sites/apps.

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