Next Level Programmatic: Understanding Approaches

RTB2 If you’re a media buyer, a robot might soon be taking over part of your job. If you’re an advertiser, that robot is now making your job easier.

For years, advertisers and media buyers used publishers’ media kits to choose newspapers, magazines, radio and TV stations and websites to find media outlets whose readers, listeners, viewers and visitors best matched the advertiser’s customer profile. However, it was ultimately difficult to tell who was actually seeing, hearing or listening to your ad.

Brands can now get in front of their target audience with more efficiency and less waste thanks to programmatic advertising, which serves ads to digital users, as opposed to simply serving ads on digital properties that promise those users.

What is Programmatic Advertising?

In a nutshell, programmatic advertising is a marcomm tool that uses software systems to place ads on a web page based on who is visiting the page. This allows advertisers to buy ads that display when people of a specific age, sex or other demographic visit a page. However, “programmatic advertising” is really an umbrella term that encompasses a handful of different approaches. They include:

Auction Pricing

There may be more advertisers who want their ad displayed to Judy Smith than there are ad spots on a website page Judy is visiting. Who gets their ads in front of Judy’s eyes? The highest bidder.

Real-Time Bidding

This is the auction. Using real-time bidding mechanisms (that operate in milliseconds using sophisticated algorithms), programmatic advertising platforms award these ad spots to advertisers who have set the highest bids to reach Judy.

Programmatic Direct

There’s no bidding here. This is a more traditional form of advertising – buyers and sellers talk directly, but use an automated platform to serve ads. Programmatic direct can include Guaranteed, Premium and Reserve ads. These ads have better locations on pages, include more direct communication between buyers and sellers, and offer more consistent ad prices, publisher revenue and ad placement.

RTB is currently the dominant form of programmatic advertising, but is declining as a percentage of programmatic buying as advertisers seek more programmatic direct ads, according to the Interactive Advertising Bureau.

Hitting the Target

To get the most from programmatic advertising, brands need to make sure they know exactly who they want to reach, meaning who the target audience is based on more than one demographic. It’s not enough to know that women make up most of your buyers. Are they single or married? Younger, middle-aged or seniors? Do they have kids or have theirs already flown the coop?

Serving the correct message to specific buyers can make or break your content strategy. Your content creators, media buyers and marketing planners must be on the same page when it comes to exactly whom you are trying to reach.

 Trust, But Verify

Programmatic advertising provides more opportunity for confusion on the part of advertising buyers, as well as more fraud on the part of third-party traffic sources (who may try to scam publishers buying increased traffic). Do your homework before you sign a contract with any particular ad seller and make sure you get transparency, detailed measurements, and solid analytics data. Ad buyers can also take steps to work with reputable ad sellers to help reduce fraud:

  • Discuss with the ad seller what type of block list they use to prevent displaying your ad to bogus traffic, such as bots. Work with your IT team to create a custom block list, or ad targets to your partner’s list.
  • Request detailed reports, or at the very least generic report samples, similar to the ones you’ll get.
  • Review your analytics for anomalies. For example, if one referring domain shows a much different browser percentage than your site’s average, check out that domain and consider blocking it.