Programmatic is a buzzword that seems to get thrown around a lot in the digital marketing stratosphere, the popularity of Programmatic has increased dramatically of the past 5 years, the initial boom does appear to be slowing, however, programmatic certainly isn’t going anywhere — in fact it is estimated that for every 5 dollars spent on display advertising in 2017 4 dollars will be spent on Programmatic. This blog post takes a look at some of the basic concepts of Programmatic advertising as well as defining some of the many buzzwords and acronyms associated.
But what is Programmatic?
Simply put — it is the buying and selling of online ad space using automated technology. These transactions are largely carried out in an auction-like environment. The backbone of Programmatic advertising is data, the technologies used to combine data from various sources (online and offline) which allows campaigns to continuously learn and optimise based on performance over time.
Last year, £2.71 billion ($3.4 billion) was spent on campaigns that were traded programmatically, accounting for 72 percent of the £3.8 billion ($4.7 billion) display ad pie in the U.K., according to the IAB/PwC report. The report forecasts that by 2019, between 80 and 90 percent of all U.K. digital display advertising will be traded programmatically.
Source: Digiday
Targeting
As Programmatic grows in popularity and the technology used improves the algorithms used to define target audiences become more complicated, there are however two basic concepts for targeting:
Contextual Targeting
This method involves targeting based on information about the website. The system will assess the websites keywords and other identifiers and display ads which are relevant to the content. For example – a user browsing a movie review site may get served ads for cinema tickets.
Behavioural Targeting
This method involves targeting based on information about the user. The system will use cookies and other methods to gather unidentifiable information about the user’s online habits to make fairly accurate assumptions about their interests. For example, a user who often browses football news websites or searches Google for football scores may get served ads for football boots.
Is Programmatic for me?
Something that has typically put people off Programmatic advertising is the perceived lack of control over where your ads appear (something which isn’t helped by ‘ad scandals’ such as YouTube showing ads next to extremist content). These days however most Programmatic platforms offer an abundance of features which offer advertisers control over where they do or don’t want their ads to show including site blacklists/ whitelists as well as content exclusions, if this is not enough there are tech companies now which specialise in ad verification (including DoubleVerify, IAS, MOAT, and Metrics to name a few) and will ensure that your ad was not only served in an acceptable place but that each impression reported was actually served ‘legitimately’ to a human.
Programmatic is of course not without limitations — a big issue that could potentially upset the apple cart in 2018 could be the updated GDPR laws (see prev blog post) these changes mean data gathered online must be explicitly accepted by users. This is obviously going to cause a huge shake for Programmatic and other cookie-based marketing — it will be interesting to see how platforms and data providers adapt here.
What’s next?
User-centric advertising is certainly the future of advertising, as advertisers are able to effectively make use of more and more user data the targeting gets closer and closer to perfect (assuming GDPR updates do not put an abrupt end to this!). The focus over the next few years will be on user experience. With the IAB new ad portfolio showing a focus on responsive design and advertisers exploring ways to push Programmatic advertising across TV and audio channels we are going to start seeing the much more effective cross-device and even cross-channel Programmatic campaigns.
Below is a brief definition of a handful of the terms you will come across when you begin to deal with Programmatic advertising:
DSP (Demand Side Platform)
An advertising technology platform that allows advertisers to Programmatically buy digital advertising inventory across multiple ad exchanges – often using real-time bidding. Popular DSPs include AppNexus and Google’s DBM.
SSP (Supply Side Platform)
Kind of the opposite to a DSP – an advertising technology platform that allows publishers to sell inventory via one or more ad exchanges.
DMP (Data Management Platform)
A Centralised computing system which allows the collection, integration and management of large amounts of structured or unstructured data.
Ad Exchange
An ad exchange is a technology platform that facilitates the buying and selling of media advertising inventory from multiple ad networks. Prices for the inventory are determined through bidding.
Ad Network
A technology platform that groups multiple sites and networks of sites and sell their unsold ad-space inventory to the highest bidder — usually via RTB.
RTB (Real Time Bidding)
a server-to-server buying process that allows inventory to be bought and sold on a per-impression basis instantaneously. This is done via an auction in the same way as financial markets do. If your bid wins, your ad is immediately shown on the bought publisher’s site.
Next steps
Get in touch with the team at WebBox to learn more about how Programmatic can add value to your digital strategy:
02920 09 19 29 or [email protected]
