Programmatic Media Buying Explained (Updated 2020 November)

Programmatic Advertising

What is Programmatic Advertising?

In the past, marketers reached out to each publisher for buying ad spaces as a direct buy. Programmatic DSPs have made that process much easier and more effective. Programmatic platforms are created to make display banners, video, audio and native advertising much more well-managed and advanced, bringing marketers a whole new level to succeed in online advertising campaigns. 

So what is Programmatic? Programmatic advertising is managed through the Demand-Side Platform (DSPs), where marketers enter and start creating, optimizing their display campaigns. DSPs’ potential is not limited to only display, also access audio and video inventories that GDN does not offer, e.g., buying ad spaces on Spotify or Over-The-Top Media.

If you want to dive into this fantastic online advertising tool, make sure you continue reading this article because we have combined all the essential things you need to know and our experiences running programmatic for countless global brands across the industries. 

Programmatic Advertising VS. GDN

Talking about buying online advertisements, you would be familiar with “banners ads,” mostly done on Google Display Network or GDN. Some people consider programmatic as similar to Google Display Network. To clear this misunderstanding, they are different from each other. Marketers need to understand the differences to choose which platform to use to meet the advertising goals. Visit the full article for the differences between Programmatic and Google Display Network

Programmatic Placements and Formats

  • Programmatic Placements: Marketers can choose to show ads on users’ devices, including Mobile, Desktop, and Connected TV, which totally depends on campaigns’ briefs and objectives.
  • Programmatic Ad Formats: Display ads are the most popular among programmatic campaigns. The common sizes of banners are 728×90, 300×250, 300×600, 160×600 and 320×50. It is highly suggested that marketers create banners in every size to increase ad impressions since each website has a different ad space inventory. Besides, videos, native and audio ads are available.  

Programmatic Buying Model 

Unlike Google Display Network, programmatic will charge marketers only on Cost Per Thousand Impressions (CPM). Nevertheless, users can optimize the campaigns toward KPIs such as CPA and CPC. The CPM of programmatic advertising is varied based on factors like the audience targeting and placements. For instance, the CPM will increase if Third-Party Audience Data is applied. 

How does programmatic media buying work?

Programmatic Media Buying Process
Programmatic Media Buying

In the past, marketers reached out to each website directly to buy and negotiate for taking ad spaces. With DSPs’ presence, which is where you manage your programmatic campaigns, you will be able to run your ads on an open exchange or programmatic guarantees and deals without having to contact each publisher. As you already know, DSPs are the Demand-Side Platform then the publishers are called Supply-Side Platform with ad exchanges and real-time bidding in between. 

Programmatic Definitions

Before we take you through a programmatic world, we must make sure that you know all the related definitions that you will not be able to avoid in programmatic. We have listed all the primary keywords that will be a handful to you whenever you get stuck. 

  1. Real-time Bidding (RTB) is the process of ad impressions served and bought in real-time by ad exchanges. 
  2. DSP is the Demand-Side Platform, which is a real-time bidding platform where marketers buy ad spaces and manage programmatic campaigns. 
  3. SSP is the Supply-Side Platform, which consists of publishers that marketers can buy available ad spaces and inventories. 
  4. DMP is a Data Management Platform, which is a software that marketers manage and audience data. 
  5. PMP is a Private Marketplace where marketers can make a programmatic deal with particular desired publishers to get the guaranteed impressions they want. 
  6. DCO is Dynamic Creative Optimization, which is connected to programmatic, allowing marketers to optimize the creatives in a real-time basis.  
  7. Pixel or floodlight is the term used on programmatic for the codes generated to track websites’ activities, e.g., conversion pixels or retargeting pixels. 

The Benefits of Programmatic 

Marketers might wonder why they need to split the advertising budget into programmatic as well. Here are several pros of programmatic. 

  • Audience Availability: Programmatic also contains affinity and in-market audiences. Nonetheless, to reach a more specific and deeper audience apart from in-market and affinity audiences, marketers might look for Third-Party Audience data, which is available to explore programmatic. You can also reach users by proximity and geo-fencing, which define audiences in particular locations, both real-time or within 30 days from the past. Similar to Facebook, programmatic also offers options to build lookalike audiences. 
  • Advanced and Unique Ad formats: To amaze your audiences and increase CTR, marketers can explore many ad formats that are not on other platforms, e.g., interactive ads, native ads, rewarded ads, weather-triggered ads, and so on. 
  • Inventory Availability: The more places your ads can show, the more audiences you can reach. Programmatic DSPs cover almost all inventories in the world. 
  • Optimization Features:  There are many ways you can optimize your campaigns on DSPs, regardless of viewability and ad positions. This allows programmatic marketers to reduce CPA or any buying models to their desired goals. 
  • Reporting: It is incredibly easy to pull out the DSPs reports, which allow you to actively optimize and keep track of your campaigns. Marketers can also customize the reports with the metrics and dimensions that they want to see. Furthermore, you can also fetch APP/URL reports to see all the available websites and apps and see their impressions and unique cookies. 
  • Frequency Controlling: Imagine you reach out to each publisher to do a direct buy of ad spaces, and your target audiences visit all those. You would end up with a very high frequency without any control. Programmatic allows you to target those websites while controlling your desired frequency.

Available DSPs to run programmatic and differences between them 

DSP is an abbreviation of the Demand Side Platform, which is opposite to SSP (Supply Side Platform). DSP refers to platforms or software that marketers use to manage programmatic campaigns. 

There are many available DSPs that marketers can choose from. The most popular ones are The Trade Desk, Google Display & Video 360, Adobe, APPNEXUS, and Mediamath. Each DSP will contain different ad inventories that are effective for various campaigns’ goals. Some programmatic traders claim that Google DSP is useful for branding campaigns because it has more targeting features and options. In contrast, some found that APPNEXUS is effective for retargeting campaigns. For marketers who want a full-funnel platform to manage all the campaigns, both programmatic and outside of programmatic, including CRM, Adobe is the best option. 

How to run programmatic effectively. Should you buy programmatic in-house or outsourcing? 

Running programmatic campaigns requires some expertise and experience as the DSPs navigator could be complicated. Furthermore, some DSPs will charge platform fees and have requirements to activate the seat to use the DSPs. Therefore, if the company does not have a dedicated team for programmatic, it is suggested to outsource with media agencies. If the budget for programmatic is not a majority, it is also not recommended to run campaigns in-house since DSPs can have platform fees.  However, it will be better to have an in-house programmatic team to have all the data and analyze it. 

Running display and video campaigns on programmatic looks easy as many people would think that it is all about impressions and reach. However, programmatic is actually very good at performance campaigns. 

Future of Programmatic Media Buying

The future of programmatic is a long way to go as the digital world is dynamic. 

The data privacy could be more strict; therefore, there will be modifications to the use of Third-Party Audience Data, which is one of the programmatic features. 

Moreover, programmatic might contain options to buy out-of-home media, allowing marketers to buy digital billboards that we see along the roads resulting in a much more effective and faster way to buy out-of-home advertising. 

The developers of DSPs are also competing to develop their platforms by adding more features and improving the algorithms to become top-used DSPs. These are because programmatic will play an essential role in digital media advertising and will continue growing. According to eMarketer, the media spend on programmatic is continually increasing.

Until now, we hope you see that it is worthwhile to learn about programmatic and to implement it to your brand. 

Still got questions? Reach out to us and our programmatic experts will handle your inquiries. 


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