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Mason Green
Mason Green

What Is Programmatic Media Buying


Programmatic advertising is the use of automated technology for media buying, as opposed to traditional (often manual) methods of digital advertising. Programmatic media buying utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price.




what is programmatic media buying



Ad inventory is usually bought via a real-time auction. Using programmatic channels, advertisers can buy per impression, thereby targeting the right audience. Since the process is automated, programmatic media buying guarantees speed and efficiency that is not matched in the traditional media buying.


The traditional media buying process involves a lot of manual work, typically with several requests for proposals (RFPs), human negotiations and manual insertions of the orders (IOs), which makes it slow and inefficient. Additionally, ads are purchased in bulk and advertisers have little control over the inventory and placement.


Programmatic advertising is the use of automated technology for media buying (the process of buying advertising space), as opposed to traditional (often manual) methods of digital advertising. Programmatic media buying utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price.


Programmatic ad buying is the use of software to buy digital advertising. While the traditional method includes requests for proposals, tenders, quotes, and negotiation, programmatic buying uses algorithmic software to buy and sell online display space.


Programmatic advertising is a powerful tool and global spend in 2020 topped $129 billion and is expected to surpass $150 billion in 2021. The United States is the biggest spender on programmatic ads, but the UK and China are catching up fast.


Now, with programmatic advertising, you can rely on an algorithm that will determine where your ad money is best spent. All you have to do is feed your programmatic solution information about your campaign, audience, and key performance indicators, and the algorithm will do the hard work!


Typically, programmatic ads are viewable between 44% and 55%, but eMarketer estimates fraud will cost digital advertisers from $6.5 billion to $19 billion each year. Consumer privacy is also an issue for advertisers especially on mobile and Connected TV (CTV).


So how can your business deal with fraud? The first thing to do is look at budget vs. reach. Marketers have been fixated on reach when it comes to programmatic advertising which can leave campaigns open to abuse through bots. If a deal looks too good to be true when bidding for ad space, then it probably is! Try not to fixate on reach but couple it with traffic quality to avoid generating fake traffic.


Hotel group IHG, the parent company that owns the Holiday Inn and Intercontinental chains, began running programmatic ads to encourage users to book directly with them, rather than with third-party sites like Expedia or Booking.com.


Working in close collaboration with Google using display and Video 360, Audi took a data-driven approach that combined all customer data rather than relying on siloed information. That way, by using programmatic techniques the marketing team could optimize its most valuable consumer touchpoints.


In addition to capturing behavioral data for improved marketing segmentation, the brand offered users the chance to customize their dream car online from a choice of 6,000 possible combinations. These individual designs were then used to create personalized dynamic ads that resulted in double the efficiency of standard ads. While buying programmatic ads resulted in a conversion rate four times higher than ads bought through traditional methods.


Programmatic media buying is the use of automated technology to help your business buy ad space. It utilizes data and algorithms to help you serve your ads to the right people at the right time and in the right place.


The last component of programmatic media buying is the ad exchange. The DSP connects to the ad exchange to process the buying and selling of ad space. This part enables advertisers to choose and purchase their ad space.


With programmatic ad buying, you can reach a wider audience of leads interested in what you offer. This type of advertising supports multiple ad exchanges and networks, making it easy for you to broaden your reach and get your ads in front of people who want your products or services.


One of the most significant benefits of programmatic advertising is that you can adjust your campaigns to perform better for your business. Once you launch your ads, you can analyze their performance to see if they drive results. Programmatic advertising offers reporting that helps you see if your campaigns are effective.


RTB, is just one type of programmatic advertising. While static auctions for online ad space involve the purchase of thousands of impressions upfront, RTB enables bidding for individual ad impressions, which makes it much more focused than bulk ad buying.


Programmatic advertising gives advertisers and publishers real-time access to data about ad placements and activity, which helps to maximize transparency. The next step is achieving transparency in programmatic costs, which is a key issue facing the industry.


Programmatic ad buying gives advertisers access to a massive ad inventory across multiple ad exchanges and networks with a click of the mouse, including premium inventory and private marketplaces with high-quality traffic. With programmatic, advertisers can make sure to maximize the relevancy of their ads for specific targeted audiences and improve ROAS.


When it comes to programmatic, the future is already here. Programmatic advertising spend is increasing every year, and the remarkable growth extends beyond display ads to native advertising, mobile advertising and video advertising. By 2023, programmatic video advertising spend in the US is forecast to reach close to $75 billion.


Programmatic advertising works on a CPM (Cost Per Mille), or Cost Per Impression, model. CPM is the price per 1000 ad impressions that appear on a website. Programmatic ads CPM is usually believed to cost somewhere between $0.50 and $2. Certainly, programmatic CPM is far cheaper than other platforms, such as social media networks where CPM can go as high as an average $6-$7.


Although programmatic spend is on the up and up, for many digital marketers, lack of understanding of the way programmatic advertising works is a huge hindrance. As the use of programmatic ad tech overtakes the traditional advertising model, the importance of building strong advertiser-publisher relationships is declining and the need to gain technical knowledge of programmatic technology increases.


Once ready to get started, begin with developing your audience personas, advertising strategy, and KPIs. This will help you in your research about which programmatic ad exchanges and ad networks are right for you.


But rather than requiring the two parties to interact directly, programmatic media buying takes this human-based system and turns it into a software process that occurs in milliseconds. This makes buying and selling ads more efficient and cost-effective through an ecosystem of platforms and algorithms.


You should start by determining your campaign goals along with deciding on the channels where you want to run your ad campaign. Once you have done that, it will be easier to determine what DSP you want to work with, as each tends to focus on different areas in the world of programmatic advertising.


For example, for paid search you may want to work with Google Ads Platform, and for social maybe Facebook Ad Manager. Another (easier) option is to work with a platform or agency that can help you get started with programmatic advertising, and then will work with you to better understand the performance of your campaigns after the fact.


What is an example of programmatic advertising? An example of programmatic advertising is when an advertiser uses real-time bidding (RTB) to automatically purchase ad inventory across a range of publishers, based on parameters such as target audience, budget, and ad placement. 041b061a72


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