What’s Programmatic Advertising, Anyway?

In one sentence: programmatic is an advertising method that uses automation to decide which ads to buy and how much to pay for them. Not enough for you? How about this:

DSP, SSP, Oh My: How Programmatic Works

Programmatic started as a way for publishers (those who are making digital content or own websites that are being visited by users, e.g. the New York Times) to get more efficient use out of remnant inventory; that is, leftover ad space on their platforms. Think of this as billboard space on websites: if no one is advertising, the publisher can’t get paid. This is how the vast majority of websites make money today.

In the early years of digital advertising, publishers had to manage individual campaigns and advertisers had to negotiate with individual publishers to place ads on their platforms. With the sheer number of online platforms in existence today — millions of websites, podcasts and other forms of digital content — the traditional method has become unwieldy for all but the largest platforms.

Put simply, programmatic uses automation to do the heavy lifting so advertisers can get outside the big platforms (Google, Facebook, etc.) and get their ads on websites throughout the rest of the internet. Publishers use a supply-side platform (SSP) to manage their advertising space inventory, and advertisers use a demand-side platform (DSP) to manage media buying on ad exchanges and digital exchanges. This works lighting-fast: it’s possible to bid on ad space in real-time as a web page is loading in a user’s browser, with the whole process taking milliseconds to complete.

Programmatic advertising unlocks a huge variety of platforms for advertisers and advertising media, from display ads to video to audio ads in podcasts. But with all this available inventory, how do you know where and when to get in front of your target audience?

The Power of Programmatic

The basic benefit of programmatic from the demand side is that it puts the power back in our hands, allowing us to take granular control of campaigns and purchase the inventory we want based on the parameters that we set, from site type to audience group. Specifically:

  • Programmatic makes it possible to better optimize your campaigns. The system looks at costs, conversions, and overall ad performance across multiple platforms and invests more resources in platforms that provide a better ROI.
  • A programmatic system takes into account more data than other platforms, including first-party, second-party, and third-party data, to refine your approach and reach your target audience.
  • Programmatic has highly granular geofencing capabilities — that is, it targets people precisely based on their physical location. That’s particularly important for brick-and-mortar businesses.
  • Retargeting with programmatic is particularly powerful. The system uses all available data to dynamically target people based on where they are in the sales funnel.

By the way: If you’re concerned about all the use of data, it’s important to remember we’re talking about aggregated data that isn’t linked to personally identifiable information.

In Short, Programmatic Lets You Reign

It’s hard to overstate the power that programmatic puts in advertisers’ hands. In essence, automated media buying allows brands to focus energy on what matters: the target audience. Think creatively about customers and understand their journeys, as well as leverage data to reach them where they are, no matter where they go (online, anyway).

Real-time tracking, cross-platform optimization, highly precise targeting, and ultimately, better ROI. What’s not to love? It’s time to Reign. Contact us to find out what THRONE can do for you.

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