What is programmatic advertising?

What is it?

Programmatic advertising or, as it is also called, programmatic ad buying is the use of software to purchase digital advertising. This method uses machines and algorithms to buy display space. Which means, programmatic advertising is a way to automatically purchase and optimize digital campaigns,rather than buying directly from publishers.
Today, programmatic marketing is a fundamental part of most omnichannel marketing strategies.

Programmatic advertising exists in a wide range of digital channels, including display, mobile, video and social. Traditional offline channels are also on the way to this digitization aspect.

The main reason why programmatic advertising matters is its effectiveness. The technology aims to turn the advertising purchase system into a more efficient one. The process will also get cheaper, by excluding people wherever possible.

Is it really that popular?

Yes, and it's growing. Global spending on programmatic advertising has almost doubled over the past 4 years and is projected to reach $155 billion in 2021 in the US. According to forecasts, by the end of 2021, 88% of all digital display marketing in the United States will be carried out through programmatic advertising. Although programmatic advertising has been growing steadily for more than 15 years, many attribute the recent rapid growth to pandemic-caused marketing strategies.

How does it work exactly?

When someone clicks on a web page that has an ad space configured for programmatic advertising, the publisher puts the ad impression up for auction on an ad exchange. Then the advertising exchange conducts an auction among advertisers interested in showing ads to a specific visitor of the named page. A lot of advertisers can participate in this auction, and the one who ultimately offers the highest price (bid) will win. His ad will be shown to the client when the page loads.

Since the process is automated and the maximum price that each advertiser is ready to offer per impression is already programmed, the auction can be completed within the milliseconds required for the page to load.

The most popular formats of programmatic advertising are banners, videos and native ads. But in addition, thanks to some platforms, you can use audio advertising on music services and radio, dynamic remarketing. Ads are displayed in both mobile and desktop versions.

What is programmatic advertising?

Programmatic advertising is not a complete automation of the ad buying process. However, when using programmatic advertising, people have more time to optimize and improve their ads.

Technologies are used to replace some part of the most complex tasks that people have historically had to cope with. This will most likely mean that there will be fewer ad buyers in the world soon, but it may also allow both buyers and sellers to spend more time planning more complex and individual campaigns for every offer. The bottom line here is that to achieve optimal success, you need to find the perfect combination between technological automation and intelligent human intervention; therefore, do not rely only on an algorithm to achieve the best results for your campaign.

In general, now you can rely on an algorithm that will determine where it is best to spend your advertising money. You still have to provide your software solution with some information about your campaign, as well as key performance indicators.

One of the problems with programming is that its dependence on algorithms can lead to ads appearing in the wrong place. The same applies to publishers and unwanted ads placed on their sites.
To avoid this, you should make sure that your demand-side blacklist is constantly updated and monitored for inappropriate sites. Some platforms allow you to exclude entire categories from advertising expenses, which can be especially useful.

If you work with an agency, make sure that it does everything possible to exclude the display of your ads on low-quality and confidential sites. In our network, we pay great attention to this issue.

What is programmatic advertising?

RTB, or Real-time bidding, is a type of programmatic ad buying. The major part of programmatic marketing works via RTB. It can be defined as buying ads at auctions in real time.

RTB is an online advertising technology that allows you to organize an auction between its sellers and buyers in real time. On the one hand, there are advertisers (Demand-side platform), on the other — publishers (Supply-side platform). The latter's traffic is converted into a request to participate in the auction, which contains various types of targeting data: location, browser, language and more, and then gets to the ad exchange. There the requests are transmitted to advertisers. The system compares all the bids and gives the ad space to the one who offers the highest price. After that, the winning ad instantly appears on the publisher's website.

Real-time bidding is just one part of the programmatic advertising ecosystem.
Other key components are also necessary for the correct system operation.
On the advertiser's side, this will be a Demand-side Platform (DSP). Suppliers (publishers) use a Supply-side Platform (SSP) to distribute existing inventory on one or more advertising networks.

These are a lot of terms to watch out for, but don't worry. We are going to talk about all of them in our next articles.

Galaksion RTB Platform

Programmatic self-service platforms make it easier for small brands to compete with companies with large budgets. Here we are going to tell you how buying RTB traffic in Galaktion works:

How does RTB work?

Let’s go through it once again. When a user visits our webmaster's website, the system sends a request to the advertiser's servers with the user's data (geo, OS, devic, etc.). Advertisers who have chosen such goals participate in an auction to display ads to this user. As a result, he or she sees the ad of the advertiser whose bid was the highest. The auction takes place automatically in a fraction of a second: if the advertiser's server does not have time to respond during this time, it automatically drops out of the auction.

What distinguishes Galaksion RTB traffic?

Most advertising networks sell traffic that is not sold in other ways through RTB, or resell traffic purchased in other networks, paying their own commission. As a result, the final customer receives expensive low-quality resale traffic.

There is no such problem in Galaktion, because we do not have any resale practices. We sell direct clean traffic exclusively from our webmasters, we always know its source and are responsible for the quality.

What else do you need to know about Galaksion RTB traffic?

All our advertisers can buy traffic via the CPC or CPM pricing model, depending on the ad format. To protect our webmasters from unwanted content that may appear on their site as a result of an RTB auction, we use special technical solutions to filter ads that violate our rules.

Since you need your own system and servers to buy ads using the OpenRTB protocol. That is why other advertising networks most often buy ads this way. It is a rare case when private individuals have all the necessary equipment.

Another important point to mention: in any complex advertising network, when working with RTB, there are discrepancies in statistics on our side and on the advertiser side. If there are large discrepancies in the data, it may simply be unprofitable for the advertiser to work with the advertising network.
Since we value our reputation and always focus on the profit of our partners, we take up this problem ourselves. The advertiser pays only for the nu

Advantages of Programmatic Advertising

Even though automation can be sometimes intimidating simply because of being new, it is obvious that programmatic advertising is a win-win strategy for both advertisers and publishers.

For advertisers , the advantages of programmatic advertising include:

— The ability to scale
Programmatic advertising allows advertisers to reach a large audience by buying advertising space from any available publishers’ inventory, rather than being limited, as it could have been before.

— Real-time flexibility
Advertisers can adjust ads in real time based on their impressions and use a wide range of targeting criteria. Thanks to excellent automated targeting, the advertiser's budget can be better used and spent more efficiently.

— Effectiveness
The process is more optimized, and more relevant ads are displayed using targeting. Access to a large pool of publishers means that advertisers can get a better return on their investment, while publishers can also maximize their revenue.

For publishers, the benefits of programmatic advertising include:

— Simplicity
Programmatic advertising greatly simplifies the sale of advertising space. Publishers can optimize their ad sales with automation tools that reduce the time required to find advertisers.

— Relevance
When visitors come to the publisher's website, they are shown ads that are relevant to them, since they are part of the advertiser's target audience. Programmatic advertising allows advertisers to access a range of publishers, eliminating the need for phone calls, email, or other slow forms of negotiation.

— Effectiveness
Programmatic advertising can reduce costs and increase margins for publishers, helping them earn more from the available advertising space.

What’s next?

So, Is programmatic advertising the future of ad buying?
Probably, yes. It is impossible to say how much of the advertising is now sold programmatically, but this sector is definitely successfully growing. Technologies such as machine learning and artificial intelligence have an impact on everything, and programmatic marketing is no different.

This process is quite exciting to watch, isn’t it? We are happy to witness it with you and change Galakison’s strategies and solutions as the modern times require it.

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