Marketers all over the world learn thousand of different things every year. Programmatic advertising is a thing that has become popular quite recently, however it is not new at all. In far 2013 IDC made forecast that its expenses will reach approximately 60% by 2016. In dollar estimation, it was more than 33 milliard two years ago.
The situation gets even more complicated that many newbies, altogether with old-timers, consider programmatic and RTB advertising as just the same thing.
In our article we will make it all loud and simple for you to understand what it is about and how you can win from these trendy things.
Closely connected, but different
Displays buying that refers to digital advertising is the most powerful and often used marketing tool. At the beginning, publishers and advertisers used to contact each other directly by e-mails or any other ways to discuss prices, amount of display and other details of cooperation.
Internet became a popular playground for people and the processes should have become quicker and more flexible. Old system was clumsy and time consuming. Besides, development of mobile Internet, a lot of gadgets with connection to websites have appeared. There was nothing left to do, but change it all.
Programmatic was designed to save advertisers’ time and money. It also helped in showing particular ads to those who can be really interested in them.
So, what we have.
Programmatic media buying is process of inventory purchasing with the help of special software based on different algorithms.
It is of great use nowadays as we have to deal with thousands of users fragmentation caused by different digital channels and potential publishers. Higher efficiency is one side of the coin. Additionally, the approach contains information about clients’ behaviour, geography, time zones and other factors that help advertisers to tune their targetings more precisely and plan more detailed budget for the campaigns.
RTB (Real Time Bidding) is mainly an auction where advertisers bid against each other via specially designed automated platform, like DSP. Generally, it looks as follows:
When a person visits a website plugged to programmatic, advertisers are immediately informed about it and see some information about him: approximate age, location, the device he or she uses, previously visited websites and some other. According to it, the decision is made how valuable the client is and how much can be paid to show ad exactly to him. The biddings started and a right to display the ad is given to that advertiser who had offered the highest price.
What is the difference between them?
First of all, RTB advertising is one of the forms of programmatic implementation.
Ads, acquired with the help of programmatic, are often connected with premium publishers like Forbes or The Wall Street Journal. These playgrounds generally hold some inventory on their website and don’t show it at the auctions. They sell it directly to advertisers for premium cost that guarantees publishing for a certain period of time or certain amount of displays. Such approach is called programmatic direct.
Why it is beneficial?
As we said before, such technology excludes human interaction and helps both main players meet without intermediaries. Thus, the cost of advertising campaigns is lower for one party, while the other one can have more income as there is no mediation and nobody is charged for it.
Besides, mass displaying meant showing ads to those who are not likely to be interested in it. Using programmatic, you will stop wasting your money and have more effective campaigns. People don’t like ads, but they are more loyal to them if they are relevant to their needs and interests.
If you still fear to go to programmatic at all, you can try to combine both approaches and later choose which one will be more beneficial for you.