What is Programmatic Advertising? - A Primer Blog Feature

By: Digital Media Training on December 2nd, 2014

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What is Programmatic Advertising? - A Primer

advertising | programmatic | Digital Media Landscape

Programmatic advertising is the process of using software to buy and sell digital ads, including display ads, video ads, Facebook Exchange ads, and mobile ads. It can also be used to monitor data in real-time, and make adjustments on the fly—a process that’s very different than traditional ad campaigns, in which it takes longer to see the effects and make appropriate adjustments in response to that data.

The process

Robot-programmaticOne type of programmatic ad buying is called real-time bidding; it involves ad auctions taking place in real time. However, there are other types of programmatic ad buying as well. For example, “programmatic direct” is another type of programmatic ad buying in which buyers can purchase a specific number of ad impressions in advance, and choose which sites the ads will appear on. “Premium programmatic” involves buying ads on particularly desirable sites, while paying a higher cost-per-thousand rate. These brands are interested in having ads appear on very specific websites or sections of publication.

The programmatic advertising process is entirely automated, so it’s more efficient to sell and buy ads than it is for sellers to interact with buyers directly.  However, programmatic advertising is used almost entirely for digital ads. Television ads and other traditional media can be sold programmatically, but this is still new to the traditional media side. Programmatic ad campaigns also don’t necessarily help buyers who switch from one type of device to another.

Despite these limitations, programmatic ads simplify and speed up the process of selling digital ads online, and cut down the cost as well. This is part of a larger trend where machines provide assistance with some of the grunt work.

Pros and Cons

Obviously, efficiency is the biggest benefit of programmatic advertising. In addition, it can help businesses make smart financial decisions based on real-time data.

The drawbacks? Some businesses rely on programmatic without paying attention to the content of their ads, which can lower the effectiveness of ads that don’t have the same impact as one carefully crafted by designers and copywriters.

In addition, a human touch is needed to address prospects using multiple devices, and complement programmatic advertising with advertising in traditional media.

Finding a smart blend of creative and programmatic can help businesses find the best of both worlds.    

Your job is safe

If you’re wondering whether you should be concerned about being replaced by a machine, don’t worry. The rise of programmatic advertising doesn’t mean that ad buyers need to fear for their jobs--though they may be spending it on more specialized work and spend less time with insertion orders, spreadsheets, and other paperwork.

Although programmatic advertising can use data to help determine the best ad for a specific demographic, and the time to serve the ad to them, there is still a lot of detective work involved. And even though machines can automate some work and make ad buyers’ jobs easier, having less menial work simply means that you’ll have more time to spend on tasks that can’t be algorithmically replicated—the ones that require a human touch, such as strategizing, planning, and organizing custom campaigns and making adjustments based on data.

Programmatic advertising can be sold along with ad campaigns, because perfecting copy and graphics still has a big impact on the type of results the package will have.  Ad sellers also need to educate advertisers on everything from creating an advertising campaign that includes programmatic, to wrestling with strategies and challenges such as cross-device targeting. You’ll also likely need to educate the buyer on why ads have different rates at different given moments, and how to combine programmatic advertising with traditional advertising.

A Sellers Guide to Programmatic Advertising