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4 Things Every Advertiser Should Know about Programmatic Buying

By Jenna Bruce on Tue, Mar 17, 2015 @ 09:10 AM |


If you’re reading this blog post it’s most likely because you’ve been hearing a lot of buzz about programmatic buying, but you don’t have a clue what it actually is. Don’t worry – you’re not alone. In fact, many of the people in your office who are throwing the term around most likely don’t have a firm grasp on the practice or technology involved. Late night talk show host Jimmy Kimmel, who attended ABC's upfront presentation last year, joked that “programmatic buying” is the “gluten-free” of advertising because everyone is talking about it but not many people really understand it.4 Things Every Advertiser Should Know about Programmatic Buying

What Is It Exactly?

Programmatic buying refers to a wide range of technologies that have begun to automate the entire process of buying, placing, and optimizing advertising, eliminating the need for a human component. Essentially, through programmatic technologies, advertisers can shop for ads much like they shop for shoes or washcloths on Amazon.

If you would like us to get technical, which you probably don’t but we’re going to anyway, programmatic buying can be described as a method of placing media buys automatically through digital platforms such as trading desks, exchanges, and demand-side platforms (DSPs), thereby eliminating the need for the traditional use of manual RFPs, negotiations, and insertion orders to purchase ads.

Now that you know what it is, here are four specifics of programmatic buying every advertiser should know:

1. It’s Not the Same as Real-Time Bidding (RTB)

Once people get a basic handle on programmatic they assume it’s the same as RTB, but it’s not. Although real-time bidding is a form of programmatic ad buying, it isn’t the only one. RTB also specifically refers to the practice of buying ads through real-time auctions whereas programmatic offers advertisers many more options for purchasing ads.

2. The Hype is Fairly Warranted

As we already discussed, the entire world is talking about programmatic buying, but is the hype warranted? We believe for the most part it is and for a couple of reasons. First, it makes buying and placing ads much quicker and more efficient, and puts the advertiser in the driver’s seat. It’s a bit like 4 Things Every Advertiser Should Know about Programmatic Buyingwhen, in the olden days, people wanted to book a plane ticket and hotel room and they had to – GASP – pick up the phone and speak with either a travel agent or reservation agent at the airlines and hotel. But now we can all just go online and name our own price and get the job done. Second, many advertisers feel this method of buying and managing ads will also help them more effectively engage with consumers, especially on mobile devices.

3. Robots Are NOT Taking Over the Advertising World

For some reason, people in the industry seem to be getting their feathers ruffled over the fact that technology will be replacing humans in many aspects. But what they should be focusing on is automated technologies will be taking over the data-heavy tasks allowing humans to focus on what they do best, which is be creative.

4. Is Programmatic Buying the Future?

In short, yes most likely. Although it’s hard to determine exactly what portion of advertising is currently traded programmatically, indicators point to the fact that the practice is on the rise. As this technology advances, an advertiser’s approach to this method of buying will become even more sophisticated and we will most likely see advanced ecosystems form and larger agencies build in-house platforms. It’s also most likely that, in time, programmatic buying will have a dominant market share of online display buying.

Right now it is primarily display ads that are being traded programmatically, but media agencies are looking at ways to buy and sell traditional media such as TV spots and out-of-home (OOH) ads in the same way.

The bottom line of this buzzworthy topic is programmatic buying offers optimal value to both buyers and sellers, and at the rate it is evolving, programmatic will no doubt become widely adopted as the growth of the digital economy quickens.

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