Media choices haven’t really changed that much in the last 50 years! The introduction of Netflix in 1997 and Googles version of PPC/Adwords in 2002 (a fascinating story for another time), were perhaps two of the biggest transformations in recent years. With the introduction of mobile came an explosion of web publishers and ultimately an explosion of web inventory. Programmatic evolved from how to sell all of those.
According to marketingland.com, the definition of Programmatic Advertising is: A system that helps automate the decision-making process of media buying by targeting specific audiences and demographics.
Sounds simple enough, so why is that so many people in the industry are still confused about what programmatic is OR isn’t, or just outright feel like it’s the fake news of media sources?
Like everything else, it often comes down to educating yourself on what it is and what it isn’t.
The answer is that many people in the media selling side have used the word “programmatic” to represent a wide range of available inventory. Initially it was much of the “unsold inventory” but that’s changed over the years to often include premium or even all of a publishers inventory – cutting a sales team out of the process.
That inventory is typically sold through an SSP or Supply Side Platform. An SSP is where available for bid media inventory is, in essence, collected. This inventory is culled from thousands of publishers across the web, and today, is more likely a mix of open AND often premium inventory.
To buy the inventory, media buyers or traders use a DSP – Demand Side Platform. A DSP is the mechanism used to bid on that available inventory (almost instantaneously) and then place the ad unit at the moment that an electronic bid is won.
With advances in bidding technology (known as header bidding) almost everyone using a DSP with a trained trader has an equal chance of winning bids.
So if you are a media planner, buyer and/or CMO why is this important to you?
Primarily it’s important because the amount of available premium digital inventory is expected to increase dramatically over the next several years as media publishers reduce their need for sales teams and layers of managers.
It’s also important for those same teams to realize the process of buying is more comparable to PPC and/or stock trading than buying traditional media.
For agency owners and media buyers that means it might be worth using teams who specialize in programmatic transactions.
Finally and perhaps most importantly, with the right team, brands and agencies can begin to close the loop of all of the data brands have (with PPC, email, social, site pixels) and actually help strategy teams make that data actionable!
When you do that, programmatic really just becomes a piece of software that’s an extension of the trading and data team’s task to build out the mid-funnel for brands and drive more consumers through the path to purchase!
