Understanding Programmatic – A Buzzword in Marketing Arena

By Daya Mukherjee Aug 08, 2017
Understanding Programmatic – A Buzzword in Marketing Arena

Programmatic has become a buzzword in the marketing arena today. The technology is changing the way media functions.

Programmatic advertising helps blend artificial intelligence and big data to let one bid for the advertising inventory source in real time, thereby offering an opportunity to display specific ads to one’s prospects. Embracing programmatic allows marketers to target their prospects, while taking into account variables such as age, gender, income level, educational level, and more.

Why Programmatic Suits Both Marketers and Publishers

At its core, programmatic advertising is all about optimizing the system for both marketers as well as publishers. In a competitive marketplace, marketers look to purchase ads/impressions (inventory) from publishers. The objective of marketers is to gain access to their audience, while publishers’ goal is to sell their inventory at optimum rates through real time bidding. Programmatic advertising provides a system that is of utmost advantage to both.

Algorithm That Looks Beneath the Waves

Data that marketers base their decisions on is too extensive and complex. In fact, it is unlikely that both will go through and comprehend the available data. The solution lies in using an algorithm that lets you look beneath the waves and enables marketers to take the right decision. Programmatic advertising algorithms can help you analyze thoroughly and buy/sell slots in real time.

Automation of Buying and Placement of Advertisements

The term ‘programmatic’ refers to a wide range of technologies that automate the buying and placement of advertisements. It leads to more profitable promotion campaigns distributed across programmatic media that include digital media (desktop, mobile and social media), television, print, out-of-home (OOH), and radio.

Spending Marketing Dollars More Efficiently

Stakeholders in digital marketing have now recognized the advantages of programmatic. Many agencies are eager to buy as much media as possible through programmatic channels. Some brands have even hired full time teams to handle their programmatic ad buying in the quest to spend their marketing dollars more efficiently.

How the System Works

Algorithms used in artificial intelligence technologies analyze huge volumes of audience data to expedite real time campaign optimization. Real time bidding enables to see most programmatic operations through, if not all.

When an ad impression loads on the web browser, the system passes the information about the page it is on and the viewer to an ad exchange, which auctions it off to the marketer willing to shell out the highest price for it. The ad of the winning bidder ad is then loaded into the ad slot almost instantly. The whole process is completed in milliseconds. Marketers are required to use demand-side platforms (DSPs) to purchase the right ad impressions and determine how much they must bid on them depending on an array of factors such as the sites they appear on and user history. The price of impressions is determined by the system in real time.

The digital world is moving toward an era when most, if not all, of the ad buying/selling will be done through programmatic. It is better to be prepared for it.

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