Fast Take On: Programmatic Media Buying
Programmatic has made headlines in the past year, becoming a prominent buzzword among agencies and clients. But what is it exactly?
Programmatic media buying, known as programmatic, is an automated method of buying digital advertising in which supply and demand partners make decisions on a per-impression basis and adhere to business rules as provided by the operators of each platform.
Simply put: programmatic = automation
Audience targeting is perhaps the most important feature of programmatic media buying.
This allows advertisers to deliver a speciﬁc advertisement to a previously deﬁned audience only,
ensuring higher levels of targeting success.
Real Time Bidding
Real-‐time bidding is the pricing mechanism through which much of programmatic media buying is handled today.
It allows multiple advertisers to bid on a per-‐impression basis for the audience(s) they wish to reach. The higher demand for a supply-‐constrained audience, the higher the price for that impression.
Much like the bidding mechanism in paid search, the highest programmatic bidder pays $0.01 more than the second highest bidder. These impressions, however, are often subjected to undisclosed pricing ﬂoors, which can artiﬁcially inﬂate costs.
Programmatic Data Enables Audience Buying
Using a combination of 1st, 2nd and 3rd party data, advertisers can deﬁne, segment and buy their audiences with far more speciﬁcity than the traditional demographic-‐style approach.
Individual-‐level data based on demographics, user behavior, brand aﬃnity, and purchase behavior can all inform targeting in a ways never before possible.
The Move To Programmatic Direct
Higher quality inventory, the control and accountability of a direct relationship, and the advantages of pricing scale are driving more and more advertisers to a programmatic direct model.
As a result, we will see the amount of programmatic digital display ad spend continue to rise in the coming years.
Before long, Television, OOH and other media types will be traded programmatically.
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