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Programmatic: the facts and the fiction

Global programmatic ad spend reached $38 billion in 2015 and it’s predicted to make up 50% of all digital spending by 2019, according to eMarketer. But, despite the amount of money pouring into programmatic advertising, marketers continue to be baffled by its acronyms and tech jargon. Surrounded by myths, it’s time to separate the facts from the fiction.

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What is programmatic advertising?

Programmatic ad buying uses automated technology to buy, sell and fulfil digital advertising using data to inform the process. This technology replaces the need for manual human led RFPs, negotiations and insertion orders to purchase digital media.

What are the advantages of using technology instead of humans?

Efficiency. But… no, robots are not taking over digital advertising.
Programmatic technology streamlines the ad buying, selling and fulfilment process. The programmatic ad buying and selling process happens in milliseconds, this allows billions of ad impressions to be served in a targeted manner – targeted ad buying is not possible at this scale when done manually.
It doesn’t replace the need for humans; the technology driving programmatic campaigns only represents 50% of the work involved, the rest is down to people.

Fiction: my first party data isn’t usable so I can’t do programmatic

Fact:

Consumers demand personalised and targeted messages and first party data is essential to deliver this. Harnessing first party data isn’t as difficult as some advertisers think. It comes down to having the right partner in place to make sure data is being collected, stored properly (with privacy laws respected), so it can be used to optimise marketing and sales activities, not just for programmatic purposes.

Fiction: programmatic inventory is the stuff no one else wanted to buy

Fact:

Programmatic was initially designed to create demand for unsold inventory, but this does not make it low quality. If there was a problem with quality, that is a thing of the past. Due to high advertiser demand for programmatic ad inventory, many publishers are now making their best inventory available in programmatic market places and advertisers are using it to deliver highly targeted branding campaigns using data driven insights. Advertisers can specify the type of audiences they want to buy, based on their first party data insights, to avoid purchasing low quality inventory. Remember, one person’s trash is another person’s treasure. For example, 45-60 year old women with an interest in knitting might be trash inventory for one advertiser and treasure for another. The availability of this type of audience information like this is increasing the price for the advertiser and yield for the publisher, which makes programmatic valuable for both parties involved.

Fiction: programmatic is the same as RTB

Fact:

There are four types of programmatic transactions: open auction (RTB), invitation only, unreserved fixed rate and reserved. Although RTB does make up 80% of the market place. RTB stands for real time bidding and put simply is an online auction selling impressions. Within the auction, publishers supply data about their inventory and advertisers define the type of inventory they want to bid on, based on data insights. The advertiser with the highest bid wins the auction and places their ad in the space they were bidding for, paying one cent higher than the runner up’s bid.

Fiction: programmatic is just display ads

Fact:

Programmatic ads began with display, but you can now buy most inventory programmatically, even native ads, on mobile or video. Tradedoubler can deliver display, video and mobile ads currently and will include other formats in the coming months.

If you would like to find out more about programmatic advertising campaigns, get in touch.