Programmatic Advertising 101…and beyond

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AdNews Australia offers a quick look at programmatic today and where it’s headed tomorrow in an article by Matt Von der Muhll, MD APAC at SpotXchange. We thought it was a good snapshot.
 

An Overview of Programmatic

Programmatic advertising is the  automated sale of ad space.  It can automate the full transaction using an auction-based marketplace or automate work flow behind the sale once it has been negotiated by traditional sales staff (programmatic direct).


How does it work?

There is “marketplace programmatic
When a visitor lands on a webpage carrying an ad unit (‘inventory’), its publisher sends a request for an ad to an ad server, which directs it to a programmatic marketplace. The marketplace then returns an ad that matches the criteria specified by the advertiser – audience data, price and other deal terms. The ad selected is the winner of an auction between advertisers competing to serve their ad to the viewer – a process called real-time bidding (RTB). Marketplaces can be set up as open (all advertisers can participate) or private (publishers invite a handful of select advertisers to bid for their inventory).

…and there’s programmatic direct
Programmatic direct bypasses the marketplace, then funnels the ad through the other pipes involved in the programmatic process.

Types of programmatic deals:

Open marketplace
Private marketplace
Programmatic direct.

Getting the most out of programmatic
Programmatic gives both publishers and brands the opportunity to gain increased control and transparency, while also providing granular reporting which enables real-time campaign adjustments to meet changing objectives on the fly.

For publishers, the analytics represent an opportunity to understand buyer behavior and make smart real-time selling decisions to help maximise yield. The approach should not be looked at as simply a mechanism for clearing remnant inventory, but rather as a smarter way of selling inventory. A mix of deal types can be accessed to select the best sales mode for different types of inventory, whether that be direct sold campaigns, network or exchange buys, or programmatic direct buys.
A programmatic platform helps juggle multiple deal types to achieve higher yield and satisfy advertiser objectives. It can also help optimise for cross-screen video, with simple integration into smartphones, tablets and other connected devices.

For advertisers, it also represents a smarter way to buy. A way to introduce bottom-line efficiencies, while at the same time getting the most out of spend. It can be used to manage campaigns across multiple screens and formats, gives greater transparency on buy side rates and lets them gain more control of spend.

The Big Question: What’s the Future of Programmatic?

The programmatic ad world has grown quickly, with hundreds of software vendors popping up to fill different gaps in the market. As it matures over the next few years, the market is expected to consolidate away from multiple providers each playing a small part in the process to holistic inventory management platforms.

Ultimately, end-to-end platforms that allow advertisers and publishers to manage entire media buys and integrate back into data management platforms and other marketing systems will rise to the top.

 

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