As online advertising constantly evolves so does the technology for buying ad space. Using real time bidding (RTB) and typically handled by either outside advertising firms or in-house marketing or IT teams, programmatic buying is the process of executing digital media buys in an automated fashion through digital platforms such as exchanges, trading desks and demand-side platforms (DSPs). This method replaces the traditional use of manual RFPs, negotiations and insertion orders to purchase digital media. It’s an online auction of ad and promotional video space through which advertisers are able to target one specific person, in one specific place, on a specific device at a specific time.
According to Attila Jakab, client services director at London-based real-time advertising firm Infectious Media “programmatic buying is an automated way to execute media buys and the buying decisions are made on an impression-by-impression basis.” Sheldon Gilbert, CEO and founder of New York based Proclivity Media, compares programmatic buying to the way that iTunes unbundled personal music buying. “Marketers can specify location, they can specify the context, but more importantly, they can specify the specific individuals they want to reach… It’s search marketing on steroids.”
With programmatic buying, marketers can set specific parameters for the online ad buys. It is basically structured as a blind auction where buyers are given the opportunity to bid on the individual impression in real time and the highest bidder wins.
The remainder of programmatic media buying is done through ad bundling, or pre-planned online ad placements selected based on when, where and who advertisers want to target online.
The beauty of programmatic buying is that advertisers can actually take all of the Big Data they have on consumers and apply it to their digital media buys to position their creative when and where they want and changes can happen in a matter of minutes based on real time activity.
Is programmatic buying the future of digital ad buying? According to IDC “spending on real time bidding display advertising will accelerate at a 59% compound annual growth rate through 2016, making it the fastest growing segment of digital advertising over the next few years.” Rocket Fuel calls programmatic buying the most exciting development to sweep across the digital landscape and has published this introduction to programmatic buying white paper that is definitely worth a read.
- Almost half of U.S. consumers (47%) spend up to two hours each week looking for coupons and deals. A similar proportion (45%) say they’re more likely to plan their shopping trips around circulars, coupons, and deals than they were at this time last year. (Red Plum Purse String Survey – September, 2013)
- Almost four in 10 social gaming participants (38%) make in-game purchases (Arkadium 212-337-3701)
- Although men watch more online video, women view the majority of video ads (53%). (VideoHub, div. of Tremor Video 646-723-5300)
- More than two-thirds of Internet users (68%) trust the opinions of other consumers posted online. (Nielsen 646-654-5000)
- Seven in 10 tweets (70%) posted while watching TV are sent during program airtime, rather than commercial breaks. (Social-Guide, div. of Nielsen 800-864-1224)