What is Programmatic Advertising?

Updated on May 18, 2020

Programmatic advertising is a modern way of working with adverts placement and inventory. More and more marketers start applying this approach because it possesses plenty of benefits. In the article, we are going to observe the key terms connected with programmatic, its meaning, and benefits.

What is a programmatic approach?

Programmatic marketing is working on the basis of programmatic advertising software. The latest provides the automation of placement and purchasing of advert inventory. Such an approach makes the whole process much faster and easier. There exist special platforms for the marketers (for instance, Polus.media), which function as mediators between publishers and advertisers.

The creation of such an approach was provoked by the necessity to deal with the remnant ad space. However, today it is widely used by the famous advertisers and publishers to optimize the investment and time resources. 

Thanks to the application of special algorithms, the cooperation between publishers and advertisers becomes easier. It allows capturing the digital advertising ecosystem on a more advanced level. Thus, you can observe and apply various channels for advertising including social media networks (for instance, Facebook, Instagram, etc.), publishers’ websites, video advertising platforms, and plenty of other channels. That’s why compared to any other approaches to advertising, where you have to use several platforms to access every channel separately, programmatic has many advantages.

Let’s observe the key benefits of programmatic advertising:

  • transparency (there are lots of options offered for both advertisers and marketers on programmatic platforms, including targeting and others, so it is easy to control where your investments are going and how your inventory is used)
  • efficiency (by means of such platforms, it is possible to analyze the results of your advert campaigns in real time, so there is no need to wait until the end of the campaign and spend your time and money)
  • advanced audience reach (thanks to a large number of options, targeting becomes more effective, the potential reach is usually shown on the platform, so you can select the most productive locations for ads placement for your brand)
  • real-time information (to provide the customers with profitable purchases, the platforms give full information concerning advert inventory and make an analysis of the data).

What is more, programmatic advertising is very money- and time-saving. You can forget about long negotiations and associated costs.

Useful terms

To fully understand the essence of programmatic, it is required to know the key terms used in the sphere:

  • DSP (demand-side platforms are used by advertisers allowing them to easily control their adverts, manage, and optimize them if necessary)
  • SSP (supply-side platforms are almost the same, they are used by publishers and allow them managing their advert inventory in an advanced way)
  • RTB (real-time bidding is one of the directions of programmatic, which works on the basis of online auctions organized by special advert exchanges for the cooperation of advertisers and publishers, the deals are made in real time)
  • CPM (it is one of the popular pricing models used by programmatic, it sets cost per thousand impressions).

The platforms described allow optimizing your budget and building a better marketing strategy for the promotion. 

Programmatic models

There are several models offered by a programmatic approach:

  1. 1.Direct PA (the advertisers have access to the advert space database offered by the publishers at the fixed costs, there are 3rd-party platforms, which help control, deliver, and manage the inventory purchases)
  2. 2.Private marketplaces (they are similar to the previous model, only the prices are agreed upon during the direct communication between advertisers and publishers)
  3. 3.Invitation-only auctions (this model represents private marketplaces, which allow joining only by invitation)
  4. 4.Open real-time bidding auctions (advertisers obtain access to the global database of inventory offered by various publishers. It might be remnant or even premium space. Every marketer has a right to join such a platform).

In general, programmatic allows solving plenty of problems of modern marketing. Human involvement becomes lesser, while it is possible to concentrate on more essential things.

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