Programmatic Buying: An Inside Scoop

By: Madeline Rain Twitter: @MaddieAkopiantz

Advertisers have a new best friend. We now have the ability to accurately reach specific people within a demographic and it is our understanding of programmatic buying that is driving this change. This technology automates the buying, placement and optimization of digital advertising. In contrast to traditional advertising, which forces buyers to pick particular sites on which to place advertising, programmatic buying allows advertisers to target particular consumers based on their demographics and/or psychographics (Hoelzel, Mark).

Methods:

The technologies used in programmatic buying allow advertisers to reach their target consumer in multiple ways. The three most common buying practices are:

  • Audience Targeting: Advertisers build a target using demographics and/or psychographics and the programmatic provider uses tracking pixels and/or geo-targeting to reach these consumers.
  • Contextual Targeting: Advertisers buy ads based on page content and/or words while the programmatic provider uses their technologies to deliver ads adjacent to this content.
  • Audience Retargeting: Advertisers buy a particular demographic and/or site and the programmatic providers use cookies to track and deliver the advertisers content to these individuals over an extended period of time.

Each of these techniques allows advertisers to eliminate waste and increase their return on investment.

Products:

At this point the inventory or bank of programmatic ads consists primarily of standard and pre-roll units. The standard units currently sold to digital advertisers are 300×250, 728×90 and 160×600. That being said, programmatic providers are branching out into radio, digital out of home, and high impact units. The co-founder of Undertone, Mr. Franchi, said, “It’s about plugging programmatic capabilities into what we do and using it to accelerate our plan of bringing those high impact formats to market in a programmatic matter” (Kantrowitz, Alex). Undertone now offers programmatic buying options for Interstitials, PageGrabbers, Screenshifts, etc.

The programmatic inventory is made up of two different categories: ‘first look’ and remnant. Programmatic providers get ‘first look’ impressions when they have priority over all or most advertisers on a particular site. Remnant impressions are sold to programmatic providers to fill open inventory on sites, meaning remnant impressions are made up of impressions that were not guaranteed in traditional buys. All of these units are purchased through real-time acquisition.

Recognition and Understanding:

Advertisers hear people say “real-time acquisition” and they think of bots and other non-human traffic. However, programmatic advertising is facing the same fraud problems as the rest of the industry. According to ANA 58% of advertisers are highly concerned about ad fraud. It is a huge problem with programmatic buying, because you can’t necessary see your advertisements. However, these problems are not exclusively related to programmatic publishers and the entire industry is working toward a solution (Robgers, Zach).


Opportunities:

Programmatic advertising is just starting to take hold. It was first introduced to the market through the programmatic systems used when purchasing search advertising. As the digital industry addresses the issues of quality, viewability and fraud, programmatic advertising will only continue to grow. Based on the current buying structure of programmatic advertising it will never eliminate the need for traditional digital buys. However, it will streamline advertiser’s ability to reach a particular demographic and/or psychographic. Programmatic buying will transform marketing and will take digital advertising to the next level.

Works Cited:

Hoelzel, Mark. “THE PROGRAMMATIC ADVERTISING REPORT: Mobile, Video, And Real-Time Bidding Will Catapult Programmatic Ad Spend.”Business Insider. Business Insider, Inc, 30 Sept. 2014. Web. 01 Oct. 2014.

Kantrowitz, Alex. “Undertone Acquires Upfront Media | Digital – Advertising Age.” Advertising Age Digital RSS. N.p., 11 June 2014. Web. 01 Oct. 2014.

Rodgers, Zach. “AdExchanger: News and Views on Data-Driven Digital Advertising.” AdExchanger News and Views on DataDriven Digital Advertising. N.p., 31 Mar. 2014. Web. 01 Oct. 2014.

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