To truly understand programmatic advertising, it’s helpful to refer to the ‘history’ of ad buying. I had been in the Advertising Industry for about 6 or 7 years when I discovered the award-winning TV series Mad Men. The show centered on the fictional Madison Avenue ad agency, Sterling Cooper. This is a great scene in which Peggy, the new staffer, is being given the tour of the office by Paul:
You have to love his line, “That’s the whole shakedown actually. They don’t sell ideas or campaigns or jingles. They sell media at a 15% markup.”
There is so much more to advertising than just buying media space. But there’s no doubt that buying the RIGHT Ad space truly is key in getting results.
You can have the best ad creative ever produced – but it’s the placement that ensures it will be seen by your intended audience. Imagine, you have an important message, you want to share it, but you put your soap box on the wrong corner and nobody hears or listens to what you have to say – not very effective at all! And that’s why buying the best ad space at the best price and targeting it to the right audience, is the whole shakedown, really.
Today there’s a whole new ball game for Media Buying called Programmatic advertising. Data Driven, complicated, and highly targeted, it’s a huge leap forward from those Mad Men days!!
So What IS Programmatic Advertising?
Programmatic advertising is by definition, the automated buying and selling of online advertising space. But there is so much more to it than just a simple trade of money for space. The buying and selling of digital advertising inventory is run by an ad exchange, kind of like a stock market and basically a very cool computerized auction that brings together the buyers and sellers looking to trade. Those involved in these transactions include:
Advertisers (or their agencies) — those folks who want to share their messages on the internet and
Publishers, those who have websites with desirable digital space available for these advertising messages (CNN, Sports Illustrated, People etc…) and are willing to make it available in this automated exchange.
Programmatic advertising brings the whole digital ad-buying process to a hyper focused level. It uses machine learning and data about consumer behaviour and buying habits and applies this info within the exchanges to buy, sell and place digital ads literally in the blink of an eye! This exceptionally precise targeting results in a much better Return on Investment (ROI) for both the publishers and the advertisers!
Watch for Part 2 – How does Programmatic Advertising Work? – Coming Soon!