Programmatic Advertising – What Is It And What Are Its Advantages

For a brand to enhance its presence in the digital environment, it must plan a marketing strategy in which digital advertising is present.
A well-designed advertising campaign must have a prior research process that identifies the ideal type of audience, the most appropriate channels to transmit it, and the type of message that should be used to achieve the objectives set.
Surely, there is an advertising campaign that you remember, regardless of the passage of time.
Programmatic advertising is becoming one of the best allies for brands that want to boost their digital presence on a large scale.

What Is Programmatic Advertising?

Programmatic advertising is the digital advertising model comprising the automated acquisition of advertising space on websites, online magazines and newspapers, blogs, etc.) by advertisers.

Currently, 85% of advertisers and 72% of publishers use programmatic advertising since it allows a greater return on advertising investment.

Programmatic ad buying differs from traditional ad buying in that it relies on data and algorithms to strategically serve automated ads to users based on things like their buying histories and behavior.

In addition, by not having to resort to a long acquisition process, which includes proposals, bids, quotes, and negotiations, implementing a programmatic advertising campaign is much more agile and faster.

As in the operation of any advertising purchase, we can distinguish two main actors: applicants and suppliers.

• Advertisers are on the demand side; they buy advertising space and choose the audience they want to impact with their product/service ads.
• And publishers, media, or blogs are the bidding party in charge of generating income by selling their advertising space.

As a general rule, publishers or media choose which ads they want to advertise in their spaces, at what price, and what type of advertisers they accept, while these others choose the audiences to impact and the maximum amount they wish to pay.

How Does Programmatic Advertising Work?

Programmatic advertising represents a total change in the strategic approach concerning the

the traditional advertising inventory buying and selling model in the online medium goes from a “Site Centric” approach to a “User Centric” one.

This change of approach based on the purchase of audiences is caused by the advancement of technology: the use of algorithms allows the analysis of thousands of data on the behavior of web users and offers important differences:

• Buying impressions (ad inventory) occurs in real-time.
• Each advertising impact opportunity is evaluated in real-time, depending on the user’s profile, the site, and its bid price.
• Each impression/impact opportunity is considered and valued individually and independently.

These changes help optimize campaigns in real-time to create effective strategies aimed at impacting the right user on the right website and at the right time and using an appropriate and personalized message and offer.

Technology In The Programmatic Ecosystem.

From a technological point of view, programmatic buying is an automation of buying and selling Advertising inventory in which three platforms are involved: Ad Exchange, DSP, and SSPs.

AdExchange is the platform where advertisers and publishers buy and sell digital ad impressions fully automatedly through a series of real-time bids.

• They manage the relationship between DSPs and SSPs and obtain a Commission
• There are two types of Ad Exchanges: Open Exchanges and Private Exchanges

DSP (Demand-side Platform) is the demand-side platform that allows agencies and advertisers to buy ad inventory on different platforms.

• They use their Tracking system by implementing pixels
• They use optimization algorithms in the purchase of inventory and prediction methods to maximize the ROAS of campaigns.
• They integrate Data (Audience Segments) from the DMPs to evaluate the impression to buy.

SSP (Sell-Side Platform) is the technological platform publishers use to market their advertising inventory, whether in the display, native, video, or audio formats.

• They are responsible for managing the Advertising Inventory, so they send each impression to the best buyer.
• They provide tools for optimizing campaigns, income, and profitability for support and media.
• Also Read: How To Use Digital Marketing In The Industrial Sector To Stand Out In A Saturated Market

Advantages of Programmatic Advertising

Currently, programmatic advertising is the leading method of buying and selling advertising space in the digital environment.

But programmatic advertising does not work by itself despite its benefits and technological advances. Like any other strategy, it requires further data analysis to develop an adequate strategy that allows us to obtain the established objectives.

Compared to other online advertising models, programmatic advertising offers great advantages.

User segmentation and personalized messages

Not all Users are the same or have the same expectations. The programmatic purchase allows us to use user data (historical and in real-time) and enables us to approach the personalization of the advertising message.

This translates into two great advantages:

• Possibility of segmenting the target audience we want to impact.
• Design personalized messages that fit individual preferences based on the profile of the audience.
• Content adaptation to attributes, behavior, context, device, location, etc…
• Consistent in terms of when the user is concerned with the brand (conversion funnel), location, and channel (paid search, paid social, programmatic, emailing, SMS, . . .).
• Consistency in terms of message, offer, value proposition, and price presented in the ad and following the content of the landing page to which we take users.
• Combine different advertising formats from a single platform: Display + Video + Audio + TV + Outdoor.

Greater positioning and reach

Programmatic advertising generates a greater reach than other types of digital advertising thanks to the fact that online platforms allow users to be reached anywhere in the world.

Transparency and control

Programmatic buying platforms offer complete and detailed information on any aspect of our campaign and obtain real data on what type of customer views the ad and who interacts with it, the sites on which our ads are published, the cost per line of the campaign, the creatives that work best, the operation by dates, time slots, devices, and much more, all practically in real-time.

Measurement of results in real-time and return on investment

As we anticipated in the previous point, one of the things that brings the most value to advertisers is the possibility of measuring results in real-time and, consequently, being able to make adjustments to the campaigns based on the return on investment.

Agility in purchasing processes

Programmatic ad buying differs from traditional ad buying by not having to resort to a lengthy acquisition process, which includes proposals and negotiations. This means that the time required to launch a campaign is considerably reduced in most cases.

Now that we know what programmatic advertising is and all the advantages it offers as a leading method for buying and selling advertising space, what are your main future challenges and opportunities to remain efficient and competitive?

Also Read: The Dilemma of Attribution In Digital Marketing