Advertising has entered, for some time now, a new era. A time when advertisers do not randomly advertise their products or services. In reality, they have the ability to reach much more specific segments and, ultimately, display more interesting ads. Programmatic advertising is already a reality, but do we know exactly how it works and the potential it has?
Programmatic advertising is a type of advertising based on Big Data, where advertisers buy an audience and not advertising space. It is a buying and selling model, therefore, differs from traditional advertising by the fact that it reaches exactly the public that has an interest in what we have to offer.
For example, we know that our product is aimed at 40-year-old women with children, who live on the outskirts of the city and do not have a car but are looking to buy one. Through programmatic advertising, it is possible to reach this profile of people, discarding those who do not meet the characteristics of our audience. Therefore, in turn, it becomes a very profitable way of advertising since you pay only for potential consumers of your products.
Programmatic advertising uses complex algorithms to detect matches between the data provided by brands about their target audience and the advertising spaces in different media at a specific time. In other words, it is a semi-automatic system where advertising spaces are purchased through bids.
All of this is possible thanks, without a doubt, to great technological advancement offered to business owners through excellent companies like Ranwell Productions Advertising which allows us to get to know people better and find an effective way to communicate with our audience.
However, to understand how programmatic advertising works, it is important to be familiar with the following terms.
Trading Desk: a team of people that develops its own technology to buy programmatic advertising on various platforms known as DSPs.
DSPs: Demand Side Platforms (DPS) work with an internal algorithm that finds the cheapest impressions for the advertiser’s banners every second.
Ad Server: This is an ad server that allows you to broadcast or serve a set of ads within the advertising spaces of different websites.
Ad Exchange: It is the meeting point between digital supply and demand. This collects the advertising spaces of the SSPs and generates auctions that are sent to the DSPs that are in charge of automatically buying those spaces.
SSP: The Sell Side Platform (SSP) are platforms that automate the commercial management of thousands of digital media.
All this means that it will be the advertiser who will buy advertising in real time through bids known as Real Time Bidding, specialized platforms to offer impressions to the advertiser with the highest bid. Therefore, these are digital auctions in order for advertisers to pay for the number of people with a specific profile.
Ad Exchanges or Marketplaces are the platforms that act as intermediaries between buyers and sellers.
Programmatic Advertising has undoubtedly been an innovation for advertisers and brings them great advantages. Here we show you the most emblematic:
Thanks to this advanced technology, the medium that offers the advertising space is not in charge of the conversations for its distribution, but by connecting to an SSP platform, the resources are managed automatically.
As far as programmatic buying is concerned, the market is opening up, allowing any medium to buy and sell advertising space, taking into account the preferences of the advertisers. In addition, advertisers and media from around the world can distribute their campaigns and access them without geographical limitations.
Unlike in the past, where prices were set by the medium, with programmatic advertising advertisers bid exclusively for the purchase of an impression. This guarantees that the price paid is adjusted to market demand.
In these campaigns, it is possible to carry out different segmentations, either geographically or demographically, by content through websites, by audiences, which are generated thanks to the information that we have previously collected on the platform and by technology that ends up segmenting by device, telephone company or operating system.
However, like everything else, programmatic advertising also has a number of disadvantages and drawbacks. We explain them to you:
Programmatic advertising costs more than display advertising since impressions are more expensive. This is due to the number of factors involved. For example, platforms such as YouTube have shown their discontent regarding this type of advertising due to the fact that numerous terrorist groups have entered millions of dollars thanks to the advertising hosted within the platform.
As a result of the actions explained in the previous point, many media outlets have begun to create their own ad sales tools, avoiding the use of external platforms. This has caused a lack of transparency regarding audience data.
Undoubtedly, programmatic advertising is a great invention as long as its actions are carried out under the corresponding regulations.
