What elements do you think characterize the evolution of online advertising in recent years?
From my point of view, these three cannot be missing:
– Personalization.
– Automation.
– Real-time interaction.
All of these components are part of the topic we will discuss today. Do you know what it is? Well, it is none other than programmatic marketing or programmatic advertising.
What is programmatic marketing or programmatic advertising?
Programmatic marketing is a type of online advertising based on algorithms that allows you to select who will be shown a particular advertising piece.
The basis for making the decision lies in the intersection of the characteristics of the advertiser's target, with those of the visitor to the website selling the space. In this way, you can invest more money in those website visitors who most closely resemble your target.
All transactions are carried out using parameters established in algorithms. Some of the demographic data that can be differentiated are age, sex, social class. It is also possible to segment by different geographic regions and limit the hours of the day when advertising is displayed.
During the process, algorithms take over to enable the best offer to be made for the customer profile closest to the ideal. All this means that the process runs without the need for human intervention, so it can operate 24 hours a day and more efficiently.
It is important to note that these transactions can be carried out both in real time and asynchronously. That is, all online advertising that involves real-time auctions (RTB) is programmatic, but not all programmatic advertising is RTB. If the auction process is not carried out in real time, behavioral data, data on who is shown the advertising, as well as immediate feedback on the transaction can be lost.
Programmatic marketing in real time
As we have said, programmatic advertising may involve real-time or non-real-time auctions.
For example, advertising on Facebook involves algorithms to select who will be shown the advertisement, that is, it is programmatic; but payment is not made in real time.
RTB is a complex process that starts when a visitor clicks on the URL of a website that offers programmatic advertising.
Once the process is started, this website gambling data vietnam consults its AdServer, which is a server with instructions for making the decisions that follow. For example, to choose which advertisers will be given the opportunity to bid. At this point, the AdServer has not yet chosen whether to offer the advertising space for RTB or not.
Let's suppose that it does. In the next step, the AdServer contacts an SSP ( Sell Side Platform ), which is a platform that automates the selection of advertisers in order to benefit as much as possible the owner of the site where the ad will appear. To do this, it uses its own algorithms, which are based on data that the SSP either has about the consumer or obtains from other servers.
With all this information, the SSP enters into a contract with the AdExchange, the marketplace where the transaction takes place. The AdExchange contacts advertisers through DSPs ( Demand Side Platform) . DSPs have the opposite objective to SSPs: to obtain the best purchase price for advertisers. When the AdExchange has passed on the information about the potential consumer's characteristics, the potential consumer asks them for their best offer for the impression.
Once a winning bid is received, the DSP passes the bid data to the AdExchange and then backtracks to the original web instruction that tells the browser where to get the content, artwork, etc. to load.
This entire process takes place in milliseconds, while the page loads for the visitor.
If you want to see the process in a more graphic way, we recommend the following video .
Advantages and disadvantages of programmatic advertising
Programmatic marketing offers advantages for both publishers (website owners offering space) and advertisers and visitors.
For media outlets, it offers an opportunity to obtain more and better offers for space. In addition, it is a more transparent process since it does not depend on what a few advertisers are willing to pay.
The same thing happens on the advertisers' side, as it is not the media that sets the final price. Although the media can set a minimum bid limit, it will be competition between advertisers that determines the final price.
Additionally, for the advertiser there are the obvious advantages of being able to decide which impression to pay for and when to do so. This means that they can show the right person, at the right time, the right ad.
On the downside, programmatic advertising requires higher investments from advertisers than traditional online advertising. This means that the circle of advertisers who can benefit from its advantages is reduced.
Furthermore, the large number of actors involved in the process (SSPs, AdExchange, DSPs, etc.) makes it difficult to keep track of all transactions in detail. For example, there have been reports that the Islamic State has earned millions through programmatic advertising on YouTube.
Is this the future of online advertising?
The future of online advertising is definitely driven by increasingly complex algorithms. This suggests that methods such as RTB, which may not be easily accessible to all brands today, will be in the future (and there will be others that we have not yet imagined).
One of the biggest challenges for brands today is to advertise effectively on mobile devices. To address this, one of the options being considered is native programmatic advertising . What is this? Well, the sum of native advertising, that is, useful articles or content promoted through payment in a mass medium, plus programmatic technology to decide who to show a certain ad to and when.
