Programmatic Marketing Explained

A New Way of Marketing

A lot of people have no idea what we are even talking about when we first mention programmatic marketing. And that’s not much of a surprise because when it comes to marketing the old school ways are what most people think of. But, in this technology-driven society that we live in there are quite a few ways to get your business to the forefront with marketing strategies.

So What is Programmatic Marketing?

When it comes to different strategies, programmatic marketing has changed the game immensely. To put it simply, this form of marketing is the use of artificial intelligence and machine learning to buy ads in real-time instead of through human negotiations and pre-set prices.

When it comes to traditional methods of advertising there are quite a few steps involved, including requests for proposals, tenders, quotes, and negotiations. However, programmatic marketing ads are almost instantaneous.

The software that we mentioned helps to make the job of advertising easier because you are able to better plan, better optimize, and better target the audience you are advertising to.

Going Once Going Twice…

One form of programmatic marketing revolves around real time bidding (RTB). While not all programmatic marketing is RTB, most of it is because it helps us automate the process of ad purchasing. To put things into perspective, roughly about 90% of all programmatic marketing purchases goes through RTB however there are a few other processes involved. Those processes are called programmatic direct marketing and private exchange buying, also known as PMP.

We know that this process is a lot of industry related terms and can be confusing so lets break down programmatic direct marketing and PMP a little more.

Programmatic Direct Marketing

  • This form of marketing is a way to buy a guaranteed amount of impressions on a specific site.
  • Programmatic direct marketing is typically used for larger scale ads such as full-page ad takeovers.
  • This often involves a fixed price agreement instead of an auction.

Private Exchange Buying (PMP)

  • This form of marketing refers to an invitation only marketplace where only a select number of publishers will invite certain advertisers to bid on their ad space.
  • PMP is often used as a way of bypassing ad-exchanges completely. It is a process where your buying platform is plugged directly into the ad publisher’s inventory.
  • In PMP an auction will usually take place however, the terms of the deal are pre-negotiated which makes creating a more manual environment than regular real time bidding.

Getting Even Deeper into Programmatic Marketing

Before we get into this next bit of information we want to give you a few definitions to help it make a little more sense!

Ad Exchange This is where publishers meet various advertisers and agree on a price to display their ads. Think of the trading floor of a stock market, online on a digital level

Demand- Side Platform (DSP)– A demand-side platform is simply a tool or software that allows advertisers to buy ad placements completely automatically

Supply-Side Platform (SSP)- This is similar to a demand-side platform but it is a platform for ad publishers where they can reach out to advertisers to sell ad space

Data Management Platform (DMP)- This platform is used to collect, store and sort information

Now that you have a little bit of background information lets jump back in!

When it comes to real-time bidding, it is just one part of the many that makes up the programmatic marketing process. It is a way of auctioning out ad space based upon a case-by-base basis instead of showing every person the same ad. For this form of marketing to work properly there are a few key components that need to be in place.

For the advertiser these components are referred to as a Demand-Side Platform, or a DSP, that is connected to a Data Management Platform (DMP). When it comes to the suppliers or the publishers, they use a Supply- Side Platform (SSP) to distribute their available ad space across one or multiple Ad Exchanges.

Real Time Bidding & Programmatic Marketing

We’ve mentioned real time bidding a few times so far in this blog post so lets delve a little deeper into how this system works. When a visitor enters a website, there is a request that is sent to an ad-exchange along with information on the website and data from the visitor. Once this information is gathered it is then matched against available advertisers and an auction takes place in real time between the various advertisers that match the criteria needed for the ad space. For example, lets say you’ve visited a website that sells work out equipment but you don’t make a purchase. Later on when you are catching up on your local news you see ads about workout equipment everywhere. These ads end up in front of you through the process of real-time bidding.

The company selling the workout equipment has told publishers that they want to show their ads on these websites, but only to people who have visited their site and didn’t make a purchase. During the time it takes for the website to load an auction takes place between the workout equipment page and everyone else that is interested in displaying their ads to you. The winning bider then gets to display the ad to you on the publisher’s website. The process of real time bidding allows for a better and quicker audience targeting and enables ads to be bought and sold on a case by case bases. This means that only visitors who are in your target audience will be shown your ad.

Programmatic Marketing and Your Business

The use of programmatic marketing is on the rise and there is no better time than now to get involved! At Focused Image we work with you to make sure that your content is accessible to your target audience and this form of marketing is a great way to do so. If you are interested in learning more about this process and how our team can help you spread your visibility contact us today!