How exactly does an ad that looks like it read your mind gets to pop up on a website?
Media buying, the process of buying ad space, has evolved. Now with programmatic advertising, advertising, advertisers can quickly reach the right audience for their ad campaign. This is possible because the process is automated. It also uses real-time data for very precise ad targeting.
What is programmatic media buying?
In the world of digital advertising, programmatic media buying refers to the automated process of buying digital ad inventory (ad space on a publisher’s website, for instance) through special technology. The system completes this process in milliseconds. It uses real-time data to show the right ad to the right audience. This helps achieve better results.
How does programmatic media buying work?
To understand how programmatic media buying works we need to review three essential characters to this story:
- Demand Side Platforms (DSP): DSPs are platforms that enable advertisers or media agencies to purchase ad impressions from publishers in the most cost-effective manner automatically.
- Supply Side Platforms (SSP): SSPs are AdTech platforms designed to simplify the process for publishers by helping them manage and monetize their ad inventory. They connect with multiple DSPs to sell available impressions, aiming to secure the highest possible CPM.
- Ad Exchanges: An ad exchange is another technology platform where SSPs offer publishers’ ad inventory to DSPs via RTB auctions. It is like the marketplace that facilitates the process of matching advertiser demand with available ad space from publishers.
In plain language, programmatic media buying works like this: on one side, the advertiser sets up their campaign on the DSP that’ll help buy the ideal ad space for it automatically. On the other side, the publishers use an SSP to manage their ad inventory and sell it in real time.
When someone visits a website or opens an app, it sends out a request for an ad. The DSP and SSP connect through the Ad Exchange, where advertisers bid for that ad space in real-time. The highest bidder wins, and their ad show up instantly for the user.
And BOOM. There you have it.
Types of programmatic media buying
There are three types of media buying
Real-Time Bidding (RTB)
RTB or open auction, is a programmatic advertising method of buying and selling a publisher’s ad inventory in a real-time auction. When someone opens a website or app, it sends out an automatic request for an ad. Advertisers then bid in real time, and the highest bidder gets their ad displayed.
Private Marketplace (PMP)
PMP is another type of programmatic media buying that uses real-time auctions to buy and sell ad inventory, but unlike RTB, it is not available to all buyers. A PMP is more restricted and only a selected group of advertisers gets to participate in the auction. These PMP platforms are highly exclusive and the ad inventory that gets sold here is from premium publishers, which drives very efficient results.
Programmatic Direct
This is your traditional handshake deal but in digital form. The publisher negotiates directly with the advertiser, and they agree on selling the ad space at a fixed Cost-Per-Mille.
What is the main advantage of programmatic media buying?
With programmatic media buying, publishers and advertisers can say “¡hasta la vista!” to that manual action of buying and selling ad inventory. This changes advertising completely as it saves time and effort. It also makes the process more transparent, provides valuable data insights, allows for more precise ad targeting, and gives both advertisers and publishers more control over what ads appear where.
Make your life easier and your results thrive by going programmatic!
Programmatic media buying is an automated, cost-efficient, and data driven method to purchase ad inventory with precise targeting. “It is changing advertising by helping advertisers get more value from their ad spend. It also allows publishers to earn better revenue for their ad space without getting stuck in long negotiations.
At Refinery89, we create technological solutions that elevate the entire programmatic advertising process to deliver the best results for our clients. Get in touch with us to find out all about our AdTech!
