Programmatic Advertising: The Options

March 31, 2016 Francis Dignan

As you may already know (especially if you’ve read our fantastic ebook), Programmatic Advertising is changing the way Display Advertising works in a huge and exciting way. The thing is, Programmatic is a very broad subject heading. A banner, if you will. There are many different options within Programmatic, and choosing between them is tough. Don’t worry though! We’ve got your back with this handy guide to what’s what in the world of Programmatic.

 

Real Time Bidding (RTB)

The concept of RTB is exactly as the title would suggest. Advertisers bid on inventory on a per impression basis, and the space goes to the highest bidder. This is usually an automated process, where a business will have a system in place which looks for the right combination of user profile, website and cost per impression.

This whole process takes less than 100 milliseconds, and then whichever ad won the bid is displayed for the user. The only part of the process that isn’t automated is the audience selection, which is something the marketer will do based on their own research. The marketer needs to decide what kind of buyer persona is most susceptible to the offer they’re making. Following this, all the advertiser needs to do is set a maximum budget, and their ad will be seen by their perfectly analysed and identified audience, who will be most likely to engage with the campaign.

This is a great programmatic solution for buying inventory, and shows almost immediate results in impressions and click through rates, providing the advertiser has done the research prior to launching the campaign. If you’re wondering about how to make your own buyer personas, here is some guidance.

 

Programmatic Direct

This aspect of Programmatic Advertising is far more controlled than RTB, and involves only one seller and buyer, and the CPM is fixed. Once the inventory is sold, this is guaranteed space, and is usually the premium screen real estate on particular websites.

This is certainly a safer option than RTB, as the advertiser has direct control over where the ads are published, so they won’t be associated with any websites they deem to be negative for their brand. It also means they can be more specific with budgeting, and know exactly how their ads will appear on a page.

It’s a completely different sort of buying process to RTB, as buyer and seller are connected directly (hence the name), rather than separated by a bidding process. It may be less technologically advanced, but it does allow advertisers to take complete control of their campaigns, which some brands would put above all else.


Header Bidding

This won’t have a really obvious effect on advertisers, as it’s mainly for the benefit of publishers with inventory to sell, but it’s certainly something that advertisers need to know about.

In a nutshell, this part of programmatic means that publishers can put their inventory in multiple places, and allow multiple bidding wars to take place before accepting one single campaign. It’s a way of making sure they’re giving themselves the best possible chance of generating the revenue they expect for their inventory.

For the advertisers, this is mainly good news, as it’s potentially giving access to more markets and more inventory without having to sign up to multiple ad exchanges. Yes, the CPM may increase, but with that the market standards will improve and ads will only get better as they compete for space and attention.

 

Private Bidding

Private Bidding, or a Private Marketplace (PMP), is essentially a halfway house between Real Time Bidding and Programmatic Direct. It’s a closed auction, so one publisher will invite a select few advertisers to bid on a particular piece of inventory. It’s all really transparent, so the publisher knows which advertiser they’re getting, and the advertiser knows what kind of screen space they’re paying for, and importantly, on which website.

Again, this cuts out the need for a server with a separate bidding process, and gives the advertisers direct access to the publishers, whilst also maintaining the ability on the publisher's side to maximise revenue for any one piece of inventory.

This is another really effective way to use programmatic, as you, the advertiser, can ensure you’re getting what you consider to be premium inventory, but you’re likely going to pay slightly less than if you went down the direct route, as it’s a bidding process. Some marketers consider this to be the perfect mix, and it’s a popular strategy. You still have the control over where your ad is displayed, but your budget can end up being more flexible.

 

In conclusion…

Much like anything else, there’s no definitive right or wrong answer in which segment of programmatic to utilise. As long as you do your research and know your audience well, you will be able to use some form of programmatic effectively. From there, it’s a good idea to try a few different options and see which works best for you and your business. One thing is for certain though, Programmatic Advertising is here to stay, so learn as much as you can, then test it for yourself. You should be pleasantly surprised by the results.

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