Programmatic Advertising is completely changing the way advertising space is bought on the Internet. Until now this process was carried out by people and included negotiations between advertisers and sellers of advertising space (publishers), bidding and more.
Programmatic Advertising comes to automate all these processes, using Artificial Intelligence and Machine Learning technologies.
But how does this process take place?
- First we must define the parties involved in this process.
- Advertisers use a Demand-side Platform (DSP), which is a tool that helps them buy online advertising space automatically at the lowest possible price.
- Publishers respectively use a Supply-Side Platform (SSP), a tool that helps them sell their advertising space automatically for the highest possible price.
- Finally, there are the Ad Exchange platforms, in which the automated buying and selling of ads and advertising space respectively between DSPs and SSPs takes place.
- Most Ad Exchanges take place through real time auctions, where advertising space is purchased at the same time a user enters a website.
- However, there are other ways of programmatic advertising, such as Programmatic Direct and Private Exchange Buying.
Programmatic advertising has the following advantages:
1. Advertisers are freed from the process, which we described above, so they can spend more time on optimizing ads and better shaping their advertising strategy.
2. Better targeting. Programmatic advertising platforms give many options for proper targeting, which achieves greater accuracy and better results. Such targeting options are: audience targeting, keyword targeting, contextual targeting, retargeting and others.
3. Monitoring results. There are detailed reports, which enable advertisers to continuously monitor the results of their ads and make changes whenever they deem it necessary. The reports also contain data about consumer preferences and how they interact with ads, which are very important in the decision-making process of marketers.
4. Programmatic advertising has a relatively low cost, so even small businesses with a limited budget can use this tool and benefit from the possibilities it gives.
There are also some caveats about Programmatic Advertising. These are the following:
1. Advertisers sometimes have doubts about whether some of the traffic generated by their ads is real (or if it is for example generated by bots).
2. Publishers have limited control over which ads appear on their site. They have some solutions, such as banning ads from certain categories of advertisers, but they still cannot have complete control. So in this case there is an issue with their brand image.
Despite these doubts, however, Programmatic Advertising seems to have a great future. It is characteristic that in 2018, 80% of online advertising in America was done through Programmatic Advertising platforms, while there is a tendency to further increase this percentage worldwide in the coming years.
What is certain is that Programmatic Advertising is here to stay and those marketers who have not dealt with it yet should start familiarizing themselves with it.
