16 Dec 2020

What is programmatic advertising? 4 reasons why your business needs programmatic

Today, no marketing strategy is complete if it does not include digital advertising. Understanding digital advertising requires thinking beyond one tool or channel. Digital advertising is one of the most dynamic fields to follow. A steady stream of new technological developments is constantly transforming the way companies create and deploy online ads, offering cutting-edge ways to ensure your advertising reaches your audience. One of such tools is programmatic advertising. Programmatic advertising has become the center of attraction in the advertising world and it is growing an additional ten billion dollars every year.

What is programmatic advertising?

Nowadays, programmatic can be considered the pinnacle of automation in advertising. So, what does programmatic advertising stand for?

Programmatic advertising is the automated buying and selling of online advertising. This automation makes transactions effective, streamlining the process, and consolidating digital advertising efforts in one technology platform.

Programmatic allows completing transactions automatically without manual manipulations, price discussions, signing contracts. Automation improves efficiency by reducing costs and improving the quality of the advertising campaigns.

The difference between programmatic and Real-Time Bidding (RTB)

Programmatic and real-time bidding (RTB) are often confused or attempted to be used interchangeably. Indeed, one of them is almost the same as the other, however, we still focus on the word “almost”. So, let's dissolve a tangle of misunderstandings.

Programmatic is an automated ad purchase format. It includes any automated purchase of advertising inventory through auction bidding or directly by agreement with advertising sites.

RTB is one of the types of programmatic, the essence of which is an ultra-high-speed auction based on audience data. Thus, RTB is a method of programmatic ad buying. There are many other programmatic methods, such as Private Marketplace, Automated Performance, or Spot Buying.

Real-Time Bidding (RTB) represents the process of valuing and bidding online for an ad impression in real-time. The process takes place online, via the online media marketplaces, where exchanges are made between the seller and the buyer.

In simple words, RTB is an exchange where three parties meet: advertiser, publisher, and user. Advertisers decide how much they are willing to pay for the display of advertising to a specific user. Publishers sell ad space on their websites based on an auction in real-time. Bids occur in real-time: a chain of actions preceding the display of advertising to a specific user occurs within a fraction of a second while the page is loading.

Why do you need programmatic?

Personalized marketing

Programmatic allows brands to more accurately respond to consumer demand. Customer information is used in such a way that the ad is delivered to the most relevant user in the most suitable context.

For example, a brand can use programmatic to interact with specific consumer groups, targeting devices, geolocation, personal interests, and content. You can also show different versions of the same ad to better suit viewers by gender, age, income, and more. This personalized approach dramatically increases the click-through rate and conversion rate of your ads.

Cross-device marketing

Today, customers spend a lot of time researching, shopping, and engaging online using a variety of devices - whether they are B2C or B2B customers. This may include not only mobile, desktop, or tablets but also game consoles, wearables, smart TVs, and much more. That's why for brands it's critical to stay in touch with customers across various platforms.

Programmatic allows marketers to easily implement a cross-device approach to coordinate campaigns across different devices. It gives the marketer a clear idea of which one his audience is responding to more actively.

Expansion of existing marketing strategies

Programmatic gives brands the opportunity to improve their existing marketing strategies. So, for example, displaying ads on a mobile device grabs the first attention of new consumers, and proper retargeting converts the attention into conversion.

Also, programmatic complements inbound marketing by driving quality leads to the brand's website. A well-chosen advertising strategy that targets an audience of potential customers boosts the number of consumers who already have a desire to accept the brand's offer.

Building brand awareness

Brand awareness drives customers’ decisions when differentiating between competing companies. It also grows the degree of consumers' recognition of your company's services and products. Strong brand awareness among your target audience allows your brand to become top-of-mind when these consumers are ready to research and make a purchase.

Programmatic is undoubtedly one of the most efficient ways of building brand awareness. Programmatic advertising drives far greater levels of interaction and engagement among customers, making your brand's message and key features effectively absorbed.

How to start programmatic media trading

The programmatic advertising industry can seem complicated and full of bizzy words. But it's pretty easy to understand, just take your time. We'll try to explain in simple words. It is quite easy to start programmatic media trading. In general, there are two main players, the buy-side (advertiser) and the sell-side (publisher). Each of these parties uses tools that allow them to perform their main activity and achieve their goals.

Advertiser (buy-side) is a person or organization that creates advertising creatives (content) in order to promote brands, products, services, etc. The goal of the advertiser is to attract potential buyers and convert them into customers. Advertisers use such tools as Demand Side Platforms (DSP) and Data Management platforms (DMP).

DSP (Demand Side Platform) is a software that allows buying ad slots on the publishers' websites. The main DSP goal is to buy ad space at the best price and to show it to the user who exactly matches the needs of the advertiser or Ad agency.

DMP (Data Management Platform) collects and organizes data from a variety of data sources, and makes it available to be used for targeted advertising, personalization, content customization, etc.

Publisher (sell-side) is a person or organization that owns ad spaces (websites, apps, etc). Publishers are the providers of the traffic where potential users will see the advertising which is relevant for them. The goal of the publisher is to sell ad spaces to monetize them. Publishers use Supply Side platforms for their activity.

Supply Side Platform (SSP) is a technology platform created for publishers to sell, manage, and optimize online advertising space (ad inventory programmatically). Publishers can sell ad space and monetize their websites and apps.

Ad tech market is now full of various offers. Each industry player can easily find a solution that covers all their business needs. Moreover, you can expand activities to grow business or just combine existing activities in one place.

One of such solutions is UBIDEX Programmatic Advertising Ecosystem (powered by Pragmaspace). It's a technology mix of Ad Exchange, Supply Side Platform, and Demand Side Platform (In-house Bidder) united in a global system. It can be used by Ad Agencies, Performance Marketing Agencies, Media buying teams, Ad Networks, and publishers. You can learn more at ubidex.io or contact our team to have a closer look at UBIDEX Programmatic Platform.

Full SSP Guide: what is Supply Side Platform (SSP)?

Full Ad Exchange Guide. What is Ad Exchange and how it works?

Real-Time Bidding | Complete RTB overview

White label Programmatic Platform: what is it and why your business needs it?