Programmatic advertising is making waves in the world of media buying. If you've ever booked a hotel room online using a site that instantly compares prices from multiple providers, then you’ll quickly grasp the essence of programmatic buying. Instead of manually searching for the best hotel rates, the platform does the heavy lifting.
Similarly, programmatic advertising automates the process of purchasing digital ad space. It quickly analyzes which spots offer the best value for your target audience and buys them in real-time. It's efficient and precise. This approach has gained significant traction over the past few years. By 2019, eMarketer predicted that programmatic methods would procure almost 85% of digital display ads in the U.S.
What is Programmatic Advertising?
Defining Programmatic Advertising
Programmatic advertising refers to the automated process of buying and selling digital ad space using technology. Instead of human negotiations, software algorithms evaluate and purchase ad spots in real time based on specific criteria such as audience behavior, site content, and timing.
This method ensures that ads reach the right audience at the right time while also optimizing the advertiser's budget and message effectiveness. Advertisers use programmatic advertising to place ads efficiently, while publishers employ it to monetize their online spaces.
Key Components of Programmatic Advertising (Programmatic Platforms)
Supply-side platform (SSP)
SSPs are digital marketplaces but exclusively for sellers. Publishers use them to automatically offer their ad space to the highest bidder. This automation allows publishers to maximize their revenue by adjusting ad space value based on demand.
Demand-side Platform (DSP)
On the flip side, DSPs cater to buyers. Advertisers use these platforms to find and purchase the most suitable ad spaces automatically. Demand-side platforms use data analytics to determine where an advertiser's ad will have the most impact and to ensure that brands get the best value for their spending.
Data Management Platform (DMP)
DMPs stand as the backbone of programmatic advertising by serving as repositories for user data. They collect and analyze data from various sources and provide insights into user behavior, preferences, and demographics. This information is then used to target ads more effectively, ensuring that campaigns are targeted for the right audience.
Programmatic Advertising vs. Google ads
Programmatic advertising and Google Ads cater to different advertising objectives. Programmatic automates ad buying across a multitude of platforms to ensure tailored placements based on user behavior and site content.
On the other hand, Google Ads focuses more narrowly by primarily promoting businesses within Google's search and partner sites. So, while Programmatic offers breadth and customization, Google Ads provides depth within its ecosystem. For brands seeking diverse exposure, Programmatic is the go-to, but for those targeting Google's vast user base, Google Ads remains essential.
Who Uses Programmatic Advertising?
Understanding who drives and benefits from programmatic advertising is essential. So, let’s discuss the main participants:
- Advertisers and Brands
Global companies, including Samsung and Starbucks, have harnessed programmatic advertising to strategically place their ads across a variety of digital platforms. For Samsung, this might mean targeting tech enthusiasts on niche blogs or forums, while Starbucks could be reaching morning commuters on news sites, ensuring that the right audience encounters their brand at the most opportune moments.
- Publishers and Media Companies
Renowned media corporations such as the BBC and Bloomberg also utilize programmatic advertising not just as a revenue stream, but to offer advertisers space on their platforms where content and audience align. For instance, an investment brand might find its ads seamlessly placed within Bloomberg's financial news segments.
- Ad Tech Platforms and Agencies
Firms like MediaMath and AppNexus act as critical intermediaries in the programmatic ecosystem. They link advertisers with publishers and provide the technological infrastructure such as data analytics, and strategic insights that allow for real-time, automated ad placements that drive higher returns on investment.
Programmatic Advertising in Digital Out-of-Home (DOOH)
A few years ago, the process of acquiring ad space on a digital screen was tedious, time-consuming, and involved lots of intermediaries. Programmatic advertising in digital out-of-home made the process incredibly easier, not just by offering automation in media buying, but by providing metrics to measure campaign success.
For clarity purposes, there is a subtle distinction you should understand. When we generally refer to programmatic advertising, we typically mean digital platforms like websites, mobile apps, and video streaming services. It encompasses display ads, video ads, search ads, and even native advertising that you come across while browsing the internet or using an app.
Programmatic DOOH is specific to out-of-home environments. It refers to the automated purchasing of ad space on digital billboards, transit displays, digital signages in malls or airports, and other public digital screens.
Integration with DOOH
The process of integrating programmatic advertising into DOOH is predominantly data-driven. While it might use real-time data, the targeting is often more generalized, based on aggregate behaviors or conditions such as weather data, time of day, or foot traffic numbers.
For advertisers, this means the capability to optimize ad delivery based on these conditions. For instance, during rush hours in metro stations, ads might target the working population, while mid-day might focus on tourists or local shoppers.
Interactive signage has made ad delivery more interactive for users. With navigational displays, informational kiosks, and touchscreen monitors, users can engage directly with the ad content by navigating through different product options, exploring features, or even playing branded games.
In our guide for signage advertising, we dive deeper by highlighting the power and versatility of options like LED displays, video walls, and digital kiosks as display mediums depending on your advertising material.
- Programmatic advertising automates the process of purchasing digital ad space by ensuring precise targeting and efficiency.
- The backbone of programmatic includes SSPs for publishers to offer ad space, DSPs for advertisers to buy this space, and DMPs to gather and provide actionable data insights.
- Programmatic advertising casts a wide net across various platforms for tailored ad placements, while Google Ads concentrates on its ecosystem.
- With programmatic DOOH, acquiring ad space on digital displays has shifted from a tedious task to a streamlined, data-driven process.
- In DOOH, interactive signage paves the way for deeper audience engagement, from hands-on product exploration to interactive branded content.