What is programmatic advertising and how does it work?

What is programmatic advertising

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Many business owners keep asking a question: WTF is programmatic advertising? Programmatic advertising platform denotes a special approach, which is directed to the automation of buying and selling of different adverts. This method applies artificial intellect and real-time bidding technologies, which allow displaying adverts online. The programmatic platform is used for advertising via social media, video, and mobile campaigns as well as traditional marketplaces, for instance, TV.

The meaning of programmatic platform

The first steps in the development of programmatic advertising approach were made using remnant inventory in order to increase its efficiency. The approach has been evolving very fast becoming an integral part of modern advertising. The method applies special software to purchase digital advertising. Thus, human involvement in the process is minimized, which precludes possible errors or fraud. The approach also saves lots of time, as there is no need to organize meetings and negotiate on prices and other issues with your partners. Programmatic ad exchange can do everything automatically. The system is much cheaper and more efficient than the traditional method. As a result, marketing specialists can concentrate on more important things, for instance, the improvement of their advertising campaigns.

Note that the programmatic method is not the same as real-time bidding. The latest is just a part of the approach. Real-time bidding deals with auctions, while programmatic approach also allows purchasing ads via various websites owned by publishers.

The specialists claim that the programmatic approach is a future of advertising. The number of ads purchased via this platform keeps increasing. Certain brands even have specialized teams to handle their programmatic ad buying. Today many media companies work on the development of a programmatic solution, which will allow buying and selling not just digital but also traditional adverts.

The effective application of the data for programmatic use

To build a good programmatic strategy, it is vital to understand the behavioral insights. There exist three types of data:

  • – first-party (the information, which advertisers have on their clients)
  • – second-party (the information, which is collected by someone else, for example, various agencies, and shared with the brand)
  • – third-party (the information, which can be purchased).

The data should be smartly used in order to expand the audience, which is similar to the existing one. To do this, it is required analyzing the behavior of the clients and searching for people with similar behavior. The latest might become your customers in the future. Thus, you will be able to define the target of your adverts making emphasis on the scale or accuracy.

To apply the programmatic approach, it is possible to use either an agency or in-house model. Remember that in the latest case, it is required having appropriate knowledge and resources. Working with agencies, advertisers can avoid any risks. Nevertheless, many companies prefer a combined approach.

Working with the programmatic method demands a deep understanding. Only in this case, it is possible to achieve transparency and the best results.

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