Programmatic Advertising: What Is It And What Is It For?

Logical fallacies in advertising can be effective in attracting customers’ attention, but they can also negatively impact a brand’s long-term reputation. This is especially true when conducting marketing campaigns in traditional ways, online and offline. However, efficiency can be achieved using software technologies. You will learn more about programmatic advertising in this article.

What is Programmatic Advertising?

Programmatic advertising is the automated purchase of advertising on the Internet. To launch advertising, special platforms, and algorithms are used to make decisions that minimize human participation in this process.

Ads are shown to specific user groups that the advertiser identifies using targeting available on the platform. For advertisers, programmatic is an opportunity to gain greater reach through placements on various resources. And at the same time, all this can be done in one place. In addition, the advantage of this type of advertising can be considered precise targeting and complete automation of advertising purchases. The algorithms do everything on their own; all that remains is to monitor the indicators and, if necessary, make changes or set parameters to optimize the campaign in order to avoid the same logical advertising fallacies.

Benefits of programmatic advertising:

• Maximum process automation. All media purchases are carried out automatically. This allows you to focus on creating advertising materials and texts, as well as optimizing campaigns.
• You can start, stop, and make changes to advertising campaigns quite quickly.
• Good opportunities for large-scale campaigns. You can purchase space and display your ads on a variety of platforms and thereby reach a wide audience.
• An open auction in some cases makes it possible to buy traffic cheaper on those sites where space during direct purchase is more expensive.
• Efficiency analysis. The services provide access to detailed reports where you can view information about each purchased site, the ad format, and the audience to which it was shown.
• Flexibility. This applies both to pricing (you can independently specify the minimum number of impressions or the maximum budget for a certain period) and to working with the system itself (you can easily make changes to the settings of target audience segments, change budget volumes, and then continue the advertising campaign).
• The possibility to customize your targeting as accurately as possible to attract your target audience. Since impressions depend not on platforms, but on the users themselves, advertisers have many settings options for deep targeting.

How Does Programmatic Advertising Work?

There are several participants in the programmatic system, among the main ones:

• DSP (Demand-Side Platform) – a system for organizing auctions. The DSP has access to data about their advertising campaign, ads, bids, and settings.
• SSP (Supply-Side Platform) – platforms that offer places to place advertisements.

The operating algorithm is as follows:

The advertiser places his advertising materials in the system and then sets the necessary audience settings. Next, the automated system (DSP) decides which audience and at what moment it is best to show your ad. This is where DMP comes in. This system collects, processes, and stores non-personal data about users. An auction then takes place to select the most relevant ad with the highest bid. When a bid wins the auction, the ad is shown to the user on the most suitable platform connected to the SSP network.

Methods of Working With Programmatic Advertising

RTB (Real Time Bidding) is one of the most popular options. Advertising is displayed based on a real-time auction. The advertiser in the system assigns bids for displaying ads to specific users (those whom he has set up as the target audience using targeting). If his bid turns out to be the highest, then the seller’s site will show his ad.

What the overall scheme looks like:

• The user visits a site of interest that is connected to an advertising network.
• This site sends a request to the programmatic platform, as well as collected data about the user.
• Based on this data, the platform automatically selects the ad with the highest bid that will be most interesting to the user.
• This ad is shown to the user on the website.

The RTB model is beneficial both for sites (they receive the maximum price for providing advertising space) and for advertisers. They receive targeted traffic by showing audiences ads for products and services that are most likely to be of interest to them.

Other working methods include:

• Closed auctions (private marketplace, PMP) – participation in such auctions is possible only by invitation. Platforms provide access to unreserved advertising spaces. Prices at closed auctions are usually much higher than at open auctions.
• A guaranteed private auction (PMPG) differs from a regular closed auction in that you can buy the entire inventory of one site.
• Preferred deals are a model without auctions. Here the price for displaying an ad is fixed. As a rule, those places that could not be sold through such transactions then appear at auction.
• Direct purchase (programmatic direct) is another non-auction model. The advertiser himself selects and books places on advertising platforms, as well as the required volume of placements. Accordingly, the price with this model will be much higher than in open auctions.

Tips for Working With Programmatic Advertising

When interacting with programmatic advertising, you should pay attention to the following features:

• Data about your target audience is the basis for launching programmatic advertising. That is why it is necessary to collect as much information as possible about your existing clients, about visitors to your website, and social networks, and, in general, about all points of contact and interaction of a potential audience.
• Most programmatic platforms provide clear and complete reports on the performance of an advertising campaign. However, in order to track the effectiveness of placements as accurately as possible and evaluate campaigns based on business indicators, it is better to integrate a programmatic platform with an end-to-end analytics system.
• Programmatic can be considered as a tool for solving problems at any stage of the sales funnel. To solve media problems, you can buy prominent places with good viewability. To solve performance problems, there are CPA optimization algorithms, as well as the ability to segment the audience of site visitors for further retargeting.

Conclusion

Programmatic advertising is the automation and optimization of the digital advertising purchasing process, which allows you to find the right audience and show them relevant ads without logical ad fallacies. If you are looking for a provider of reliable programmatic technologies that are equipped to detect logical fallacies and prevent fraud, we recommend taking a look at SmartHub. The company provides a white-label solution that will allow you to quickly enter the advertising technology market.