What does Programmatic advertising mean in marketing terminology?

Programmatic advertising

Programmatic advertising is an automated form of online advertising which uses sophisticated technology to streamline and improve the effectiveness of the process. It is quickly becoming the industry standard among marketers, as it allows them to target their audience more accurately and efficiently than ever before.

Programmatic advertising utilizes machine learning and artificial intelligence to serve up ads to audiences in real time. This process relies on a sophisticated technology platform that automatically optimizes creatives, auctions, and delivery of ads. Additionally, it collects data from a variety of sources and applies insights in order to customize ads to the individual consumer in order to best meet their preferences and needs.

The programmatic buying cycle is broken into three main steps: bidding, decisioning and delivery. In the bidding step, the ad technology platform - the demand-side platform (DSP) - works with the media buyers (agencies and brands alike) to determine which type of media they want to target and how granularly they want to narrow down the data to ensure they reach the right consumer at the right time.

Once the parameter has been determined, the decisioning step looks at the data inputted by the user and creates an impression opportunity, which is sent to the ad exchange after determining how much should be paid. The ad exchange then puts the bid into an auction format and determines which bid is the highest and qualifies for delivery.

The third and final step is delivery which is done by a third-party ad server which was the highest bidder on the auction. This ad server loads the advertisement and passes the bid to a publisher-side platform (PSP). The PSP then reviews the ad server’s information and decides whether it is compliant with their policies before allowing the ad to be displayed.

Programmatic advertising gives businesses the ability to connect with consumers more quickly and efficiently than traditional methods. As a result of this, businesses have more control over who they are targeting and can be more precise in the delivery and placement of ads.

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From an advertiser’s perspective, the main benefit of programmatic advertising is the ability to utilize data to target the right consumers in real-time. Rather than relying on pre-defined audiences based on demographics or interests, the technology can use detailed consumer data to drive targeting and bidding decisions. This allows brands to streamline the ad buying process by programmatically utilizing information that is already known about their customers.

Additionally, programmatic advertising provides advertisers with the ability to scale their campaigns quickly and easily. Though traditional media buying requires salesmanship, programmatic buying creates an easier and faster buying process through automation. This eliminates the manual methods associated with traditional buying, providing brands with more efficient, measurable, and performance-driven campaigns.

Although programmatic advertising has a higher learning curve than traditional media buying, it provides the opportunity for marketers to take advantage of a number of advantages. Not only can businesses access detailed consumer data to better target their ideal audience, but they will also have the ability to quickly scale their campaigns as needed, and reduce the costs associated with manual methods of ad buying.

There are a few general guidelines and best practices to consider while utilizing programmatic ad buying. First and foremost, it is important to understand the proper sequence for bidding, decisioning, and delivery. This order should be adhered to and marketers should carefully consider which parameters will best meet their goals. Additionally, marketers should take advantage of the data that is available to them and use it to create highly targeted and effective campaigns.

Lastly, it is important for brands to take the time to understand the technology and performance metrics to be able to measure and optimize their campaigns for the best possible results. By being aware of the most important factors such as campaign spend, ROI, and reach, marketers will be able to tailor their campaigns to get the most effective results.