A simple outline of programmatic buying

Posted on  |   by Tilly Marsden

As online technologies progress at an ever-increasing rate, so do the measures of buying media space. Programmatic buying is recognised as one of the latest advertising tools to be changing the face of the digital landscape, facilitating highly targeted campaigns.

What exactly is programmatic buying?

Programmatic buying refers to the process of automated software buying media space by targeting specific audiences and demographics. With real-time bidding, a buyer can assign parameters concerning bid price and network reach. A programmatic buy will account for these variables in accordance with the behavioural data from the given platform. This saves buyers going through the traditional process when purchasing media space, which is much lengthier through the undertaking of RFPs, negotiations and manual insertion orders.

Some of the benefits of programmatic buying

  1. Programmatic buying is more efficient than using human ad buyers as it is cheaper and more reliable.
  2. Programmatic buying allows a 100% transparent pricing model. This is because buyers can automatically target selected impressions for optimisation. For example, in a programmatic campaign, an advertisement will only be displayed on a particular site if a targeted user is browsing that page.
  3. Programmatic buying allows greater control for buyers. It enables site-based retargeting, meaning that ads can be placed to target previous site visitors. Chief digital officer at OMD, Ben Winker mentions that by building ‘a custom pool of users, who you know will want to engage [with] your brand,’ buyers can ‘use those insights to adjust their site list or creative executions.’

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Does this mean that robots are being used instead of people?

Programmatic buying will probably result in fewer ad buyers. However, buyers are still required for strategy and campaign optimisation. Programmatic buying saves people from doing tedious tasks such as repeated negotiations. Algorithms that use behavioural data to filter impressions enable more time for marketers to plan creative campaigns that will resonate with their target market.

The future of programmatic buying

Retargeter highlights that last year, revenues attributed to real-time bidding, which is the backbone of programmatic buying, reached $1.6 billion. Furthermore, 34% of all display advertising revenues are projected to come from real-time bidding by 2017. As technology continues to advance, so will marketers’ understanding and demand for programmatic buying. Digiday acknowledges that agencies and brands are increasingly looking to buy as much media as possible through programmatic channels, and major brands have even built in-house teams to handle their programmatic buying. Therefore, in order for brands to stay on top of their marketing strategies, it is important that they embrace the advances in media buying to maximise campaign efficiency.

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