Programmatic media buying is the ability to bid, buy and serve an ad to a user, usually in real time, through an ad exchange. This all happens in about a third of a second as the page loads and is done on an individual impression basis.
Here’s how it works. If a site has an open ad space that isn’t filled through a direct buy, it may offer that inventory to an ad exchange. Through demand side platforms (DSPs), potential advertisers can then bid on that impression if the site visitor’s data fingerprint matches the key campaign targets. As with paid search, the winning bidder gets to serve their ad. Programmatic buying was initially just available with online ads, but is now expanding to television and other mediums.
As with most media technologies, programmatic buying started primarily in the BtoC world, but the BtoB space has caught up. More and more platforms are collecting business data and offer solutions to BtoB advertisers.
In many cases programmatic buying is offering the ability to build scale and volume with some niche audiences (BtoC or BtoB) that you cannot get anywhere else. The ability to target very specific and defined users is a valuable addition to any campaign.
Should all media be served programmatically? No. Many of the limitations of programmatic media buying are the benefits or strengths of site direct buys. While it does offer a low-cost option to drive reach and scale, not all ad inventory is offered through ad exchanges. Some sites don’t participate at all, and others may only offer certain placements through the exchanges. So a campaign focusing just on programmatic may miss some very important sites.
From a media perspective, try to balance buys with a mixture of site direct and programmatic buying. This leverages the benefits of each and helps campaigns perform their best. You can maximize efficiency and performance with a well-balanced schedule.
So next time you’re waiting for a site to load, think of what may be going on in the background. There may be an entire auction taking place with advertisers all vying to serve YOU their ad.