A Beginner’s Guide to Programmatic Advertising & RTB

by Andrew Fischer, Co-Founder and CEO, Choozle

Programmatic media buying is the new wave of buying digital advertising. With a recent MediaPost report stating that “66% of marketers are planning to raise programmatic advertising budgets” in 2016, there is no indication that is going anywhere.

So what exactly is programmatic? “Programmatic” ad buying typically refers to the use of software or automation to purchase digital advertising, as opposed to the traditional and timely processes. The means in which ads are bought and sold is through a live auction, on a per-impression basis, called real-time bidding.

Real-time bidding (RTB) is a type of programmatic ad buying. RTB refers to the purchase of ads through real-time auctions, but programmatic plat also allows advertisers to buy ad impressions from specific publisher sites.

This process of programmatic media buying has significantly changed the ecosystem. Traditional media buying processes required that digital ads were bought and sold by human ad buyers and salespeople, which are expensive and unreliable.

The technology behind programmatic advertising was born out of inefficiencies in processes and economics — kind of like every other type of new technology. Prior to creation of real-time programmatic platforms, virtually all of digital advertising was available for bulk purchase and only from traditional, manual methods. Think banner ads, rich media ads, video ads and the like. If you were a media buyer, you only had one option to buy advertising space in bulk. Advertisers and marketers had lower ROIs since buyers didn’t have much control over exactly what kind of inventory they were buying as well as the ability to optimize throughout the campaign.

The introduction of programmatic into the marketplace has opened the door for marketers with any size budget the ability to throw their hat in the ring and launch digital campaigns. Programmatic media buying and real-time bidding enables marketers with the means to reach customers at a specific location, on any device and at the right time in the buying cycle, regardless of which publisher websites they’re visiting. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible.

Programmatic can provide highly efficient, high quality, and advertising markets that deliver optimal value to both buyers and sellers. Programmatic advertising has been evolving quickly in order to support growth of the digital economy across screens and formats. eMarketer suggests that around 83 percent of all ad buying activity by 2017 will be programmatic. The advantages that programmatic brings are something that fewer and fewer ad buyers are passing up. These major advantages of programmatic can be summed up in three words:

• Efficiency: Marketers can use real-time systems, rules and algorithms to automate the delivery of data-driven display ads.
• Efficacy: Marketers can ensure that ads are shown to their target audience, based on their intent to buy products or their brand affinity.
• Scale: Marketers can deliver ads across thousands of publishers in formats as diverse as display, video, social, mobile and native.

With the accessibility of programmatic media buying, how steps can marketers take to leverage this “new” technology. In reality it is easy as ABC: Audience, Budget & Creative:

• A – Audience: Who is the target audience for this campaign? By answer the question of “who” marketers are able to craft digital advertising strategy that aims to reach their target audience. This will also help direct the type of targeting – like data, contextual, retargeting, IP address, etc. – that will be utilized for the campaign.
• B – Budget: How much will the campaign spend, and over what time frame? Budget indicates how much you are willing to spend on a campaign in a given time frame. By devoting a potion of a marketing budget to programmatic marketers can determine if this method of advertising is a good fit for their brand and marketing objectives.
• C – Creative: What content and images will parallel the brand message? The most important aspect to a digital campaign is the creative. Creative is the written content and images that parallel the message a marketer wishes to convey.

Programmatic Advertising is here to stay, but luckily, this new technology is available and attainable for the masses. The inherently convenient, automated functionality of programmatic media purchases has many industry experts thinking that it is the next big thing in terms of ensuring every dollar within the marketing budget is well spent. It is in fact easy to use, does not require enormous budgets and can be executed by anyone who knows their ABC’s.

 

A seasoned digital media entrepreneur, Andrew Fischer is the CEO and Co-Founder of Choozle, the leading self-service programmatic digital marketing platform which now powers media execution for over 800+ global advertisers. Prior to Choozle, Andrew co-founded and built the RGM Alliance, a premium focused online advertising network that reaches over 120 MM consumers in the US. Connect with him on LinkedIn and @AndrewFischer_1 on Twitter.

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