Getting Started with Programmatic Advertising & Media Buying

Programmatic Advertising & Media Buying Explained

The future of advertising is transitioning towards programmatic advertising. Programmatic advertising is the automated process by which artificial intelligence (AI) makes decisions on ad placement using real-time bidding (RTB) across several channels such as online, mobile, TV and social media.

What does this mean for the future of marketers?

As the industry progresses, media buying will become more efficient and advertising will become more targeted. A company will be able to easily reach its target consumers while saving time and money.

The History of Programmatic Advertising

The traditional method of advertising is a manual process that involves many people and long, tedious wait times. Before programmatic, a brand would go about purchasing media through buyers, publishers and other third parties. Advertisers would have a list of sites they would like to have their ads placed on. This method involved an insertion order, which is a written order that grants authorization for an ad campaign to be inserted on a publisher’s website. An insertion order is a legal document that includes parameters for the ad campaign like the prices, start and end dates, as well as the amount of impressions.

It is up to the advertiser to keep track of their ad campaigns. As the internet began to expand, more ad deals were negotiated with multiple popular sites and data was scattered all over the place making it tedious and difficult to keep track of campaigns. The solution to this problem was creating ad servers that would help create and distribute ads. To further solve the problem ad networks were created to help a brand manage all of their campaigns and relationships in one place.

Since then, a lot has changed. We have been exposed to new technology like smartphones, increasing our connectivity to the internet. We now consume media across multiple devices and platforms - adding more complexity to the advertising world.

Programmatic advertising is able to skip all manual processes and buy media through different platforms within seconds.

How Does Programmatic Media Buying Work?

Machine learning technology allows the artificial intelligence to use advanced algorithms that analyze data quickly and cost-effectively. These algorithms have the ability to filter ad impressions based on consumer behavior, reducing the risk of human errors while increasing the ROI.

Programmatic media buying uses:

  • Demand side platforms (DSP)

  • Data management platforms (DMP)

  • Supply side platforms (SSP)

A DSP is a computerized buying platform, where advertisers can purchase ad inventory. DMP’s are able to collect, organize and analyze user data; this allows the advertiser to make better decisions and enables them to manage their ads. SSP’s are platforms for publishers to manage their inventory. Once a winning bid is chosen, the ad is serviced through the SSP.  

What the advertiser needs to do:

  1. Choose the parameters for your campaign such as the budget, target audience and key performance indicators (KPI).
  2. Let the program begin to look for compatible matches based on the parameters you have set
  3. Wait for impressions on the ad (views, clicks, mouse overs)
  4. Let the program track and collect the impressions
  5. Use the data to make any campaign decisions
  6. The whole process is repeated thousands of times, the automated program will continue to buy and negotiate

How are Programmatic Matches Made?

When a user goes to a page, their information is stored on the publisher's servers. The information can be retrieved through things like cookies and identifiers like logins. The publisher of that page sends this information collected to an ad server to see if there are any ad campaigns trying to target users like the one from the page. If there is a match then there is a bid made for impression and the winning ad is served.

What are the Challenges of Programmatic Media Buying?

With every up and coming technological advancement there are always some roadblocks programmatic advertising face, such as:

Privacy: Many people feel like they are being exploited with the information they give. Privacy becomes an issue because this information is the base of programmatic media buying, and without it, there would not be an accurate target audience.

Ad blockers: Programs that block users from seeing ads have become a problem. Based on a studying done by Pagefair more users have started to use ad blockers. This has resulted in a loss of revenue for publishers because the ad on their site is not being interacted with or viewed.

Brand safety: A brand’s website could easily be mixed in with toxic categories they do not want to be associate with. This can potentially hurt their image and reputation and the brand could be completely unaware of this.

What are the Benefits of Programmatic Advertising?

No room for human error: It replaces all the trial and error one might have  from spending money towards ad placements that are not effective.

Efficient and fast: Eliminates the negotiation and the need for a salesperson. Machines ensure the whole process is ran smoothly, and since there is one single buying platform, advertiser have access to all ad inventory.

Expanded reach: You are able to target the ideal audience through a variety of touchpoints. Machines can connect ads to a customized audience based on real time data.

Safe: Artificial Intelligence can detect and avoid fraudulent traffic. Although this does not always work there are other ways to implement safety, such as closely monitoring the ad campaign.

No insertion orders: Artificial intelligence can replace regular human tasks like creating manual insertion orders since there is no need for human negotiation in this process.

Reliability: If one ad placement is not working, you can change the parameters in real time and fix it to meet the goals of the ad campaign.

What Tapad Offers:

The Tapad Device Graph™ powers media execution by unifying a consumer’s fragmented digital identity into a single view of a person. We offer an open ecosystem and portable data to drive client success. Our data partners span the adtech/martech ecosystem, providing unmatched ID scale, recency and accuracy. Clients who leverage The Device Graph™ in their media buys can reach consumers and segments across more devices, making it easier to hit their KPI’s and improve ROI.