What is Programmatic Buying?
Programmatic Buying refers to the process of purchasing digital advertising with the use of automated software’s. The software like DSP, SSP, and Ad Exchange helps to automate the process as opposed to traditional process of buying and selling which involved manual human negotiations.
Programmatic – Used as a noun (programmatic) and as an adjective (programmatic advertising or Programmatic purchase)
The programmatic development was born purchasing real-time spaces. Like the finance sector with its stock markets, trading online advertising has dematerialized. Buyers and sellers are now operating through automated platforms, invented in the United States and named ad exchanges. The fully automated concept allows to achieve real-time audience through a precise algorithms stirring all kinds of socio, demographic, behavioral and geographic data. The use of this technology extends to other screens (mobile phone and tablet) and gradually exceeds its primary objective is to improve the performance of banners and video ads (display) on websites and to be interested in the forms of qualitative advertising communication (image campaign) as native advertising (numerical variation of the infomercial). The programmatic therefore reinvents business practices between advertisers and media, by inviting engineers, developers IT specialists and data mining (data scientist, chief data officer) to trade advertising space.
The RTB is a form of automation of transactions that allows programmatic. Faced with the first platforms launched by US Internet giant, DoubleClick Ad Ex-change from Google, Microsoft Advertising Exchange, Yahoo Ad Exchange, etc.
Programmatic offers unprecedented optimization of purchasing space on the digital canals. To an audience that disperses from one medium to another and follower of multiple screens at once (multi-tasking), the purpose of an advertising campaign is no longer limited to target a specific target consumers without power in addition to truly assess efficiency. The programmatic – the marketing automation space – is the answer to technology for better performance of advertising investments on the internet used from the marketing of low audience spaces or that of unsold ad exchanges have proved effective and rapidly entrusted with the sale of said premium gaps. In a split second, the programmatic real time permits addressing the right message at the right time to the right person.
Programmatic is set to spread to the entire market for the purchase of advertising spaces. Through targeting a hitherto unprecedented accuracy and greater efficiency, the programmatic is the promise to advertisers for best ROI (return on investment). If the algorithms have not replaced human labor advice and recommendations, tasks within media agencies are increasingly techniques. The programmatic attracted all the major advertisers, some devote already 20% of their advertising budget. In the short term, with the digitization of all media, it is just the market for the purchase of spaces – television, radio and even display – which would be entrusted to electronic platforms to program real-time message delivery
The development of the connected TV and the rise of big data promises a bright future in programmatic. More efficient, algorithms now govern all the information activities and online communication. These mathematical formulas results to increasingly sophisticated and affect the supply and demand for content, whatever they are, and grow to digital conversion of the media industry professions. In addition, their omnipresence is not without asking the fundamental question of data protection
The advertising market due to Programmatic should see an annual growth rate of 50% by 2017.
Definition of Programmatic Buying:
Programmatic media buying involves computer algorithms that allow quick purchase ad impressions according to preset parameters. It is an application of artificial intelligence which ensures that bid can be placed for advertising inventory in real time there by helping advertisers to get the desired ad space easily and cheaply.
Why Use Programmatic Buying:
The reason behind programmatic buying being widely accepted in advertising world is its capability to increase the effectiveness of the campaign. It helps to achieve improved results as campaign can target the potential audience.
Before programmatic buying, ad inventory were bought and sold through human negotiations which often took more time and was not reliable. With programmatic buying the use of automated software ensures that no more human intervention is required in the process and also it’s more efficient and cheap. But this doesn’t mean that there is no need for humans, humans are definitely required for planning strategies about campaign management. The use of these automated software ensures that humans can now devote more time towards making better management programs which would help in running the campaign in the best possible manner.
How Programmatic Buying works?
The data is the key element that drives the purchase program. For best results, buyers should enter as much information as possible about your target audience. Normally manufacturers have extensive data on their customers and can enter them to buy programmatic platform they choose to use. In addition, through the platform, brands can be purchased for further CPM data collected by third parties. Data provided by third parties may be demographic (e.g., Sex, age, annual income, etc..), Psychographic (attitudes and interests) and behavioral (recent searches, use of credit cards, etc..). Shopping platform program takes all this data and used to implement the campaign. The goal is not only to combine the right ad to the right customer, but also deliver the ads to the right context, particularly in the context that leads to the fulfilment of the objective of the campaign.
As with search marketing, to do deals. Deals for the desired impressions are made and the platform is responsible for carrying out the purchase with an auction system that determines who gets which prints in milliseconds: this process is called Real Time Bidding (RTB) or Real-Time Bidding. When it comes to buying digital media advertising programmatically, there are two main approaches used. Based on the price (trade price-based trading ), one tries to buy prints for the lowest price possible and seeks to benefit the campaign to try to reduce the cost as much as possible. It can be performed targeting the target audience and optimize this approach, which in practice tends to be rather manual and not automated. The other approach is used with the purchase program is based on the values (value-based). With the approach is based on values, the ability of the platform to learn from consumer reactions to ads fail. Then the platform automatically puts a value on every print ad for one to know what impressions delivered the response you want from customer … and what do not do this.
Benefits of Programmatic Buying:
- Helps to grow business at a rapid rate.
- Marketers can reach out to greater audience that too almost immediately.
- Results can be measured quickly and efficiently.
- Advertisers can reach out to right audience at the right time.
- Streamlined process helps in effective delivery of campaign to the targeted audience.
- Enable advertisers to purchase ad inventory one impression at a time thereby making it cost effective.
- With increased level of transparency in the business process, the advertisers and publishers can achieve greater level of confidence and trust among themselves.
Misconception about programmatic buying:
There is a misconception that Programmatic buying is same as Real time bidding but actually RTB is just a type of programmatic buying . Apart from RTB, programmatic buying also contains non RTB processes like direct buying.
Common Examples of Programmatic buying:
- Buying and Selling Ad Inventory using RTB and Ad Exchange.
- Direct Buying ad impressions from Publishers.
- Using Re targeting for campaign.
Expectation For Programmatic Growth:
Two major points that can lead to rapid growth are:
- Development of all creative and technological ecosystem – Advertisers are now awaiting creative and technological solutions in programmatic purchase. Now, creative agencies are increasingly integrating technology into their reasoning. A reconciliation between media agencies and creative agencies will lead to better business via programmatic which has started to happen quite often in the digital domain now. Thus the trend is likely to accelerate to meet needs of advertisers soon.
- Progressive learning of technologies is necessary in programmatic – The use of programmatic purchase requires adaptation, both from agencies and advertisers. For agency it is important so that they can explain the advertiser the real use of programmatic and its technology. The advertiser also has to realize and educate themselves and should start developing a skillful DMP whereas should also start using those data for targeted advertising. A better understanding the operation of these campaigns allow advertisers to better understand the marketing costs.
The main issue of the regulation of programmatic is to promote the development of this sector –
Regulation should encourage the development of this sector – the offline sector is experiencing a marked slowdown in recent years, the growth of the online segment is brought in 2013 by the sharp increase in advertising spending in the programmatic. In 2014 we have seen the same and with this rapid increase soon digital will take a major part of revenue
Success For Programmatic Buying:
Sharp growth for Programmatic can be seen if the transparency is well maintained i.e. Transparency must be the central goal of the regulation of the programmatic market
- Transparency in the use of personal data
- Transparency in content purchases
- Transparency in financial flows
Above are the major points where transparency should be maintained so that advertisers are not hesitant in investing and yes a flexible and responsible regulation of this sector is required and desired by all stakeholders to make it a big success