Market studies indicate that more than 90% of all online advertising is purchased programmatically today, especially in the United States. But what is programmatic media and how did it become such a crucial part of digital business? If for you that term is still new, or simply curious to know how it works and what its advantages and risks, this article is for you.
Contents
Toggle- What is programmatic media
- A little history.
- How programmatic media works: terms to be known
- How does an RTB auction work?
- Preferential offer
- Advantages of Program Advertising
- Challenges and risks of programmatic advertising
What is programmatic media
Programmatic media is being considered a powerful marketing tool for companies seeking to maximize the effectiveness of their advertising campaigns and quickly became the preferred way for big advertisers to buy digital advertising space.
The purchase of programmatic media offers companies greater control and access over where their ads are placed and how they are broadcast.
It is essentially a set of algorithms that allows buyers and sellers to automatically trade online in an auction system.
To explain in a simple way, programmatic media allows companies to reach the right audience at the right time, using data and targeting to increase conversion chances.
The programmatic media allows buyers to bid through a demand platform (DSP), like Publya,and pay only when someone clicks or previews your ad. This mode also provides advertisers with access to more data, giving them more visibility on the performance of their ads and the ability to make changes almost in real time.
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A little history.
The first digital ad was traded non-programmatically. On October 27, 1994, an AT&T announcement appeared on HotWired. With, better known today as Wired.com. The ad was innovative enough at the time to achieve an incredible click rate (CTR) of 44%. Compare this to the current industry average, which is 0.05%!
This marked the beginning of a new era in advertising, as advertisers could now reach the public in a whole new way. However, the process of buying and selling digital ads was time consuming, with marketing teams and ads like AT&T having to contact dozens or even hundreds of individual publishers to make their purchases.
This slow and complicated process led to the advent of programmatic advertising. There is some debate about when it officially began, although many attribute MediaMath to the beginning around 2007.
From there to here, programmatic media only evolved and can be the solution for companies that seek the most accurate results in targeted ads for specific audiences, with the help of algorithms and Artificial Intelligence (IA).
How programmatic media works: terms to be known
Marketing professionals and companies need to understand the different terms that define how programmatic media works. I've compiled a list of essential terms that will help you understand how it works:
Offer-side platform (SSP)
A platform on the offer side (SSP) is a software that allows a digital editor to sell display prints, mobile devices and video in real time. This happens autonomously, giving editors greater control of their inventory.
Demand Side Platform (DSP)
In contrast to a SPP, a demand platform (DSP) is a software that allows advertisers to buy inventory of mobile, graphic and video ads autonomously in exchange for ads.
They allow advertisers to buy high-quality traffic on many real-time bidding networks, making them a powerful digital marketing tool for scalability. DSP advertising should help you reduce costs by making better use of your budget.
Exchange of notices
An exchange of ads is an online market for advertisers, publishers, agencies, DPS and SSP to buy and sell listings through bids. The exchange of ads receives the inventory of the editor's offer platform and then the ad purchase management is done through the advertiser's demand platform. Editors benefit from the connection to an exchange of ads with SSP to reach a large group of advertisers.
Real-time (RTB)
The real-time bid (RTB), also called the open auction, is an auction available to all advertisers and publishers where the price of the inventory is agreed on in the real-time auction. In RTB, the highest bid wins. In simple terms, it is similar to a live auction, but with platform automation for publishers and advertisers in exchange for ads.
How does an RTB auction work?
Digital editors use SSP to automate the sale of real-time display, mobile, and video prints to advertisers in a trade-off. Conversely, advertisers use DSP to automate the purchase of ad prints on various publisher sites. Therefore, several advertisers can bid on a printout, and the winning bidder (the one who is willing to pay more) causes your ad to be displayed to the target public user.
It's important to say that all of this happens in a fraction of a second.
For example, imagine a game application where the player must view an ad between the levels. When this happens, the mobile SSP performs an auction. advertisers can bid using DSP advertising and in milliseconds the highest bid is chosen and their ad is displayed to the user.
Real-time bids are beneficial for advertisers and publishers. For advertisers, it offers a adjusted segmentation process that allows them to focus on the relevant inventory, increasing ROI by providing more relevant ads.
RTB can also increase editors' revenue because it opens its inventory to more bidders. Editors can also learn from the data from their highest bidders as to how much these bidders are willing to pay and set prices for premium releases accordingly. That's probably why real-time bids are the most popular type of programmatic advertising.
Preferential offer
This is an individual programmatic auction in which publishers sell their premium inventory at a price of CPM (cost per thousand) set for a selected number of advertisers. These advertisers bid in real time equal to or higher than the fixed CPM price.
It is worth remembering that in this type of programmatic purchase, after an advertiser makes a bid on an impression, he cannot bid again on the same print in a preferred transaction.
This direct contact between buyers and advertisers brings transparency to everyone. Editors can view the inventory before running the advertising campaign and thus control the quality, while advertisers can take care of the price of their inventory.
Private Market (PMP)
As the name itself suggests, private marketplaces are auctions with restrictions as to who can bid. Only specific advertisers have access to PMP, usually only by invitation. However, editors will implement a selection process in certain cases by which advertisers can send an application that gives them access to a private market.
advertisers who wish to have access to premium inventories before becoming available to the open market will prefer PMPs. This market also offers a much closer relationship with the editors than with RTB.
Direct programme
In the case of direct programmatics, an editor sends an invitation to an advertiser to purchase his inventory directly without a bidding process. This means that the media inventory is sold at a negotiated price, usually CPM, to advertisers for a defined period of time.
This type of programmatic advertising is also known as automated guaranteed because advertisers know where their ads will be placed and can set inventory of ads, prices, frequency limit and public targeting. Due to the nature of the exclusive and specific nature of the direct media programmatic purchase, it is particularly useful for companies focusing on premium channels and brand security. But note that advertisers must have a large budget to use this method.
Advantages of Program Advertising
Programmatic advertising offers interesting benefits to advertisers, including:
1. Efficiency: advertisers can reach their target audience more efficiently, reducing the time and resources needed for manual purchase of advertising spaces.
2. Cost-benefit: with the large volume of program inventory available in the market, selective buyers can find opportunities at lower costs than traditional advertising methods.
3. Targeting resources: advertisers can segment their ads more accurately, based on factors such as demographic data, interests and behavior.
4. Real-time optimization: programmatic advertising allows advertisers to optimize their advertising campaigns in real time, adjusting their strategy based on the results they are getting or want to achieve.
Challenges and risks of programmatic advertising
Although programmatic advertising offers benefits, there are also some challenges and risks associated with the use of this technology, which include:
1. Fraud of advertisements: programmatic advertising may be susceptible to advertising fraud, where fraudulent websites or bots generate false impressions or clicks in ads. That's why it's important to hire reliable and recognized platforms in the market.
2. Mark safety: programmatic advertising can sometimes lead to the display of ads on inappropriate or irrelevant websites, which can harm the reputation of a brand. And in that case, care is not enough!
3. Data privacy: programmatic advertising depends heavily on the public data, which can generate concerns about data privacy and consumer consent. And here we can highlight the LGPD as a major factor.
4. User experience: the large number of ads and partners displays involved can result in slower page loading times and a less continuous user experience. The complex bidding process and the use of various third-party technologies can also increase the probability of failures or technical errors.
Needing to learn more about programmatic media and apply in your business? National Vox Digital has 18-year-old expertise with proven advertising performance and results for many companies in the country. Talk to me here.
