A Short Simple Answer:
An In Depth Answer
Programmatic advertising is how marketers purchase advertising space & has been brought into the digital age, becoming, fast, seamless and efficient in comparison to traditional methods.
When reading or searching for it online, Programmatic Advertising or Programmatic Ad Buying has been referred to as the future of online advertising. Besides the very bad jokes about skynet and robot marketers, this description touches on how the human sales element is taken out of the equation and replaced with the depth of targeting potential clients that Programmatic Advertising offers.
On removing the human sales element, programmatic advertising is purchased through automated online auctions. Rather than negotiating through a salesperson for monthly advertising space, something that heavily consumes both your time and marketing budget, programmatic advertising allows users to strategically buy advertising space. Programmatic advertising gives users many of the benefits as if this was PPC advertising and works just like Google AdWords.
Let me explain.
As an example, let’s say you are a dog treat maker and your target audience is clicking on a popular dog blog.
Traditionally, you’d have to contact that blog, website or media agency to begin a lengthy back and forth to negotiate for a monthly piece of ad space on the site. The problem businesses face is, whether you purchase a small ad in the side of the site or a large banner ad, there is no guarantee that this ad will generate any leads or sales. Despite the analytics data the salesperson provides you with and your own market research, there is no guarantee.
Essentially you’ve gone back in time, back when businesses purchase large billboard space or large magazine spreads. Just like them, even with the extensive number of cars passing it or readers buying the magazine, you are essentially buying this space on the hope it will generate a sale. Digital ad space bought and sold by human ad buyers and salespeople is a heavily inefficient process, this is made largely more difficult when your competitors are also targeting these ad spaces as well. Then this creates a bidding war, which you do not want to have.
Programmatic Advertising or Programmatic Ad Buying, through using expert software and market research, allows you to fast track through the admin and negotiating to purchase digital ad space directly on the site. At your fingertips, you have all the information and analytics you need to confidently purchase space directly. This goes into two areas of Programmatic Ad Buying, Programmatic Direct and Programmatic RTB (Real Time Bidding).
Programmatic Direct, also known as automated guaranteed, programmatic guaranteed and programmatic premium, is simply an automatic solution to purchasing and targeting advertising space directly and before you competitors can. Rather than engaging in a bidding war between your competitors, this streamlined system allows you to target these ad space seamlessly and effectively. It is fast and simple, allowing you swiftly target sites and blogs that appeal to your audience as well as measure the performance through detailed analytics.
This means you can beat your competitors to advertising space and to the sale.
Then there is Programmatic RTB, this is a form of Programmatic Advertising which strongly mirrors PPC advertising; instead it is only for display ads rather than search results.
Going back to the earlier example; you are a dog treat maker, you know your target audience and you know the budget you want to spend on this particular campaign. You enter a bid you’d want to spend on advertising through the software and uploaded your ad.
Meanwhile, a potential client that suits your criteria as a target audience, is clicking on a popular dog blog. As that page is loading, there is a online auction which takes only a millisecond to find the highest bidder or bidders for display ads. You win. This controlled and automated form of ad buying means you can target your potential clients globally and at any hour of the day to generate leads and sales.
Like PPC, Programmatic RTB is paying per visitor who goes onto that page or sight. You are spending less money and will see more results in a fast and seamless automated system. Just like a PPC campaign, if you find your ad is not connecting with it’s audience and not generating the results you want, you can quickly and decisively retarget or change the direction of your marketing campaign. Give you more control.
Programmatic advertising is more than just bringing ad buying into the digital age, it is about streamlining a slow, expensive and inefficient process to allow businesses to better target their audience, automate ad buying and increase sales.