What is Programmatic Advertising?

Programmatic advertising or programmatic ad/media buying is an algorithmic process of buying or selling a display space in real-time by the use of the software. 

“Programmatic is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them.” - Kenneth Kulbok, LinkedIn Programmatic

Photo source: Pmg.com

How does programmatic advertising work?

Unlike the traditional method where you have to request for proposals and quotes, which imply human negotiation, the software is used to automate the buying, placement, and optimization of media inventory via a bidding system. Thus, the negotiations were replaced with machine learning and AI-optimization. The platform uses real-time data to identify the best online audiences and in this way you are only paying for highly effective ads, delivered to your chosen audience in real-time.

It is important to note is that for a programmatic system to work properly, there needs to exist other key components:

• On the advertiser’s side will be the Demand-Side Platform (DSP), connected to a data Management Platform (DMP)
• On the publisher’s side will be the Supply-Side Platform (SSP) to distribute their available inventory across one or multiple Ad-Exchanges.

One of the main roles of a DSP is to programmatically buy an ad space as cheaply as possible from a publisher, but the SSP has an opposite job - to sell an ad space at the highest possible price.

What are the benefits of programmatic advertising?

• Data-driven decisions
• Better campaign targeting
• Simplified campaign management
• Easy access to ad inventories
• Greater reach
• Time-saving approach

Top Programmatic Advertising Platforms:

• DoubleClick by Google
• Amazon Advertising
• Adobe Advertising Cloud
• AdRoll
• Match2One
• Rubicon Project
• Cento
• Criteo
• SmartyAds

Resources:

• What is Programmatic Advertising? The Ultimate Guide (2019)