The Basics of Programmatic Media

The world of advertising is more than just purchasing media space. Although it is completely undeniable that ad purchasing is and will always be the key to a successful business. Regardless of an ad’s creativity and brilliance, placement is the only way the intended audience sees it. Thus, it would be smart to purchase the best ad space at the best cost and target it to the intended audience or consumers.

Programmatic advertising utilizes automated technology for media buying in contrast to the traditional or manual process of digital advertising. To know more about the basics of programmatic media, we will begin with the essentials and specify a few of the most crucial principles to have a good structure for advanced topics in the future.

What is Programmatic Media?

So, let us start from the very beginning. You might be asking yourself what programmatic marketing is all about. In layman’s term, programmatic advertising maximizes a technology ecosystem to buy and sell targeted online advertising in real-time mechanically.

Image source: Pocketmath

Here is a quick description of the primary players associated with the programmatic environment:

  • Demand-Side Platforms (DSPs) allow advertisers to get advertisement impressions and help identify how much to bid for each impression opportunity.
  • Supply-Side Platforms (SSPs) allow publishers to provide inventory and help make the most of how much their inventory sells for.
  • Ad Exchanges connect SSPs and DSPs and aid in the programmatic bidding process to identify who gets the opportunity to serve in each impression opportunity.
  • Ad Servers place the winning advertisement in the corresponding page slot.
  • Real-Time Bidding, also known as an open auction, takes place when inventory prices are decided through programmatic bidding or auction.
  • And last, Data Providers boost the environment by offering added information to inform each transaction better. Points like the context or subject of the webpage where the advertisement would serve, pre-built third-party audiences, lookalike audience building, hyper-local targeting, fraud detection and prevention, and first-party data onboarding.

A marketer who utilizes programmatic technology posts an advertisement to a Server and makes use of a DSP to help make a decision when, where, and whom to offer an ad, in addition to just how much to bid for each impression opportunity. 

The programmatic bidding is done through an auction held by an Ad Exchange, and should the bid be won, the ad funnels through an SSP right into the Publisher’s Ad Server and is positioned on the intended website.

Programmatic bidding, media, and advertising take the entire process into a whole new level. It makes use of algorithmic software that takes care of the sales and placement of digital ad impressions through an ad exchange platform in no time. 

Programmatic advertising increases data traffic and incorporates online targeting methods to serve efficient, accurate, and at scale impressions; thus, taking a chance at a better return of investment for both advertisers and publishers.

How Does Programmatic Media Buying Work?

Here is an entire programmatic media buying flow in a nutshell:

  • An audience enters a website.
  • The website owner places the ad impression for programmatic bidding. 
  • Interested advertisers offer a bid for the impression.
  • The highest bidder wins. 
  • The ad is then served on the website.
  • Lastly, the user clicks on the ad and convert.

Regardless of its many steps, the entire event happens in an instant. Algorithms and a host of analytics calculate the competing bids to determine the most budget-friendly bid.

Why is Programmatic Media Buying Important?

The traditional method of media buying entails so much manual work, mostly with proposals (RFPs) requisition, human negotiations, and manual insertions of orders or IOs. All these manual work slows down the process and makes it inefficient. Furthermore, ads are bought in bulk, and advertisers have minute control over the placement and inventory. 

Programmatic media offers various benefits that were hard to imagine a few years back, and the more ad technology innovates, the more sophisticated programmatic media becomes. And because it supports multiple network exchanges, it allows advertisers to access more ad space on several different websites simultaneously. The reach of programmatic media is much wider.

For advertisers, one of the most integral parts of this process is the DSP, where programmatic bidding occurs, and where most of the data service providers link. Given that there are billions of impression opportunities available on any given day, DSP helps narrow down the options by establishing rules and parameters for audiences and websites to bid on. Yet, most importantly, DSPs use algorithms to ingest outrageous amounts of data and figure out how much to offer for each impression opportunity to meet the campaign goals.

However, if you are new to this field, the best way to begin is to get yourself thoroughly educated. You may attend seminars and webinars, do your research, and collaborate with more advanced colleagues or friends. With the right starting point, you are bound to end successfully.  

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