What is Programmatic Advertising

What is Programmatic Advertising

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Doctor House used to tell from time to time that everybody lies. We should add that numbers about programmatic advertising don’t. Over 70% of ads were performed in the USA with the help of this popular approach. Let’s study what it is about why there is so much buzz about it.

At the beginning

When Internet has just appeared advertisers and publishers used to contact each other directly to discuss options for advertising. It was time consuming and boring process. Besides, it was difficult if there were changes to apply immediately.

Little evolution has come after a while. Advertising networks started appearing and offering their services. They worked as intermediaries between two players. All you needed is to sign up, make necessary settings and start your campaign almost immediately. One of disadvantages there was that ad networks take some fee for partnership. Besides, cases of fraud activities may appear from time to time.

However, there is even a bigger problem. For example, you know that your ad about fashionable shoes is posted on a related website where potential audience is likely to be. However, there are a lot of those who have occasionally dropped into the website and your ad will be hardly ever mentioned. It is not hard to imagine that you may waste money in often cases.

Time for changes

Marketers have decided to find a way out of it, and started using machine learning and artificial intelligence for organizing ads buying in real time – that is what we call programmatic advertising.

One important note. It is an often case for marketing newbies to render programmatic with RTB advertising, that is, however, just partially true.

One should understand that RTB is just a form of the approach. Programmatic may not need RTB at all in some cases. The technology is used to make the buying processes automated only.

For example, if we talk about premium publishers like The Guardians, they may wish to have some of their inventory to be sold at particular prices and the buyer can get a certain period of time for displays or particular amount of ads postings. Such method is called Programmatic Direct.

If we take RTB advertising, we can compare it to an auction. When a visitor enters a website, DSP (Demand Side Platform) immediately informs advertisers about newcomer and his or her features like type of the device, visited websites, approximate location, gender, age and so on. According to this, business owners think about the value of this potential customer, i.e. how much they are ready to spend for showing their ads to him or her. The winner with the highest price shows his offer. The “game” is repeated with every new client. The biggest trick here is, probably, that all the process takes less than a second – everything is finished when the page is loaded and the ad is displayed.

Note: the information collected about users is anonymous and can’t be used to define a particular person.

Why it is beneficial?

First of all, let’s be honest – people don’t like ads, otherwise there won’t be such growth of ad blocking software. Advertising is a part of online life and as we can’t get rid of it, we can minimize the negative by making it useful and relevant.

Researches show that CTR level is higher in case of programmatic RTB implementation. People see not occasional set of ad materials, but something that corresponds their needs. To say it simply, advertising becomes personalized. Two people will see different ads if load the same website as the data about them will be quite different even if they are from one location.

Advertisers and publishers will have more optimized campaigns as there is no third-party to pay fees for. Thus, the former can save budgets, while second can earn more.

Skeptics are not very positive at all about programmatic, but you can add it to your current campaigns and compare the results to see what is better personally for you.


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