Simplifying & understanding the benefits of Programmatic Buying

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Programmatic buying is not a newbie in the digital industry anymore. Still 7 out of 10 of most of us will not be able to explain programmatic buying without doing a little research & brushing up on facts.

Our aim is to just simplify this for you so that what & how of programmatic buying gets registered with you.

So, how do you define programmatic buying?

Buying of an ad space on a web page automatically by various methods is called Programmatic Buying.

Let’s understand the basic behavior of programmatic buying before we get into why your business needs it.

Real time bidding – (RTB) in programmatic buying functions just like Adwords. Only difference is that Adwords is for search engines & programmatic buying is for display.

Let’s simplify this further.

As soon as a user visits a webpage (with an ad space available for RTB) the information (user visiting the profile) is quickly passed on to the platform where the auction takes place (you can call it ad exchange).

On ad exchange buyers start bidding for the available ad space & eventually the higher bidder gets it. This happens so quickly that every time any user lands on a web page with ad inventory they will always see an ad serving impressions and clicks.

This entire bidding can easily be done using Demand Side Platforms (DSPs). DSP is a system that allows advertisers to manage multiple ad exchange platforms from one interface. How simple is that? Some popular examples of DSPs are Double click, Rubicon & Mediamath.

Direct Buying – It is also popularly known as Programmatic Direct or Programmatic Guaranteed.  As the same suggests, you directly buy an ad space and therefore it eliminates any sort of auction. The advertiser & publisher decide and agree on a certain amount at which the inventory will be bought.

It is similar to the traditional media buying but since the buying & selling is automated therefore it becomes a part of programmatic.

Private Marketplace – Also known as closed auction, this take place by publishers to interact with a specific set of advertisers. The inventory is open to only the selected advertisers. There is a criterion advertisers need to fill to be eligible for this. This is to ensure the quality of the advertisers is maintained.

The advertisers know exactly the sites their ads will run on. You can say this is the biggest reason for this method gaining popularity.

Preferred Deals – In this method of programmatic the publisher deals with the advertiser individually. Advertiser needs to pay a fixed price for the inventory to the publisher. Publisher also has full control of the quality. On the other hand advertiser is given the liberty to first refusal of the offer. If that happens the inventory is opened up for Private Marketplace or RTB.

Question – So should you really jump the bandwagon of programmatic for your business?

If you’re into online business, then you must.

We’ll give you a few reasons why.

You can create specific contextual ads for specific consumers – You have the liberty to set which type of user sees which type of ad and at what time. So you avoid showing the same kind of ad to a large number of (mostly uninterested) customers. Your communication is specific & has a higher chance of converting.

Pay only for the customers you want – Due to specific targeting and communication that is qualitative in nature you don’t reach junk audience. As a result you reach only your prospects & also avoid any money wastage.

Productive use of data – The system of programmatic buying uses techniques to find the right audience. Biggest technique is of correct data usage to find users basis their behavior, their location, their clickstream, their interests etc. This increases the chances of already high chances of hitting the right audience.

Too much inventory, hence greater reach – Programmatic buying has a great network of inventory & therefore a greater reach in terms of digital properties. This just makes advertisers connect with their customers faster & on multiple devices.

Real time reporting – You can set better goals & make adjustments on the go as programmatic buying allows you to measure your results real time. This way you can improve your campaign results.

As per the given statistics, it is pretty much evident how programmatic buying is growing across the world.

Statistics - Programmatic Buying
Programmatic buying is not in the future anymore. It has very much established itself as one of the fastest growing online advertising methods. It challenges the traditional methods of media buying & opens a lot of doors for effective conversions for organizations globally.

Image Source – unsplash
Statistics Source – Magna Global

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