PROGRAMMATICADVERTISING WHAT?

HOW?WHY?

Part 1/3

What is programmatic advertising?

What’s the history behind it?

What do these buzzwords mean?

Where will the future take us?

Part 1: What? Why? How?

Let’s keep things simple - programmatic advertising is a fancy term for

the automated purchase and fulfilment of digital advertising, using more software and less humans.

Back in the day, marketers spent way too much time finding suitable spots for our online ads. Then we’d spend even more time chatting to the

owner of the ad space, negotiating terms and learning the name of their pet iguana. Basically, running an ad campaign was comparable to securing a stall at the local market.

Now imagine you have a cool robot that can do the legwork for you. The robot (who we’ll call Bob) knows exactly what your customers like and where they might be, and he’ll go to any market in the world to set up your stall. Instantly.

This is programmatic advertising! You can serve ads to any

available ad space, in real time, to an audience that you specify based on your goals and knowledge.

Of course, you need to oil your robot, and in this case the oil is data - lovely, clean, relevant data about your audience.

There are 3 main variants of programmatic marketing:

Real time bidding (RTB)Imagine, your ideal customer lands on their favourite blog, and there is ad space available! With real time bidding, you can bid on that space while your customers page loads, so they’ll see your ad instantly. Now

imagine bidding on millions of these ads in a millisecond... Sounds like a job for automation (or Bob).

RetargetingSomeone visits your website, but doesn’t buy a thing (charming). So you show them your ads on the sites they visit next, to draw them back to your world - this is retargeting. Creepy on paper, effective in practice.

Programmatic directA bit like Wall Street - you purchase ad space directly, then run the ads using programmatic software. This

style is on the increase as ad space quality can be higher.

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What is programmatic advertising?

Part 1: What? Why? How?

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Early 2000’sThe next breakthrough were ad exchanges. Here, each market stall is individually owned (in theory), and the market environment allows you to find what you really want. The exchanges are also huge... the

challenge is finding the quality ad inventory amongst the pointless slogan t-shirts and second hand socks.

2009Luckily, we now have a personal shopper in the form of the

Demand-Side Platform (DSP). A DSP helps you to

find your target audience and the best ad inventory by looking at billions of behavioural data points and matching this to the ad exchanges. Now we’re reaching the real potential of programmatic -

intelligent, automated buying of ad inventory based on real user behaviour!

TodayNow that the fundamentals are in place, the focus is shifting to improving what we have - better mobile ads, reaching more device types, and personalising adverts for maximum effect. Most importantly, the focus is on the audience, not on the publisher.

A brief history of programmatic marketing

1994Back in 1994, when digital advertising launched, there were only a few places you could show your ad, be-

cause there were only a few big websites. This meant that finding the right place for your ad was pretty easy!

Here was the first ever display advert - people were so curious, it had a 44% clickthrough rate!

But then the internet exploded, big bang style. Soon, there were so many websites, finding the right one for your audience was like trying to find a Texan vegan. This made creating ad campaigns slow and inefficient.

Late 90’sSome intreped trailblazers saw an opportunity to simplify things, creating ad networks - private

collections of ad inventory. Think of it like a

marketplace where every stall is owned by the same person. Lots more selection, but the power (and the price) belonged to the network.

Source: thefirstbannerad.com

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2009

NOW

Part 1: What? Why? How?

Pretty darn complex, to be honest. This complexity however weaves together to form something magical. You don’t need to crack the intricacies to run a successful campaign, but it can be useful to understand the basics...

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What does the programmatic world look like

ADVERTISER

AGENCY

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SUPPLY-SIDE PLATFORM

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AD EXCHANGEPUBLISHER

Welcome to

PROGRAMMATIC

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1 AdvertiserThe advertiser decides they want to

run an ad campaign, using programmatic. Yay!

2 AgencyThey’ll usually hand over to an

agency, who’ll figure out the best creative approach etc.

3 Demand-side PlatformThe agency will use a DSP (like Connexity!) to find the perfect audience profile for their campaign.

6 PublisherThe publisher is looking to sell their inventory at the best price, and as efficiently as possible.

4 Ad ExchangeThe DSP will then bid on available ad inventory on the Ad exchange, in real time.

5 Supply-side PlatformConversely, the publisher uploads their ad inventory to a supply-side platform, which then sells to the ad exchange.

Part 1: What? Why? How?

Programmatic Glossary

Ad Inventory

The ‘stock’ of ad space that a publisher has to sell.

Ad server

The software link between an ad network/exchange uses to place ads on a website.

Click-through rate

The percentage of users who click on

one of your ads.

Attribution

When you run ad campaigns across multiple touchpoints, you’ll need to attribute success to the right channel.

Contextual advertising

Robots auto-identify websites that match your target audience, and serve ads there for maximum effect.

Cost per action (CPA)

Average cost of a campaign

conversion.

Cost per thousand (CPM)

The cost of 1,000 ad views on a web page.

Data Management Platform (DMP)

A system that helps manage 1st and

3rd party data to tie demographic and

behaviioural data together.

First party data

Any data (commonly behavioural or demographic) gathered from the source i.e. an owned website.

Long-tail ad inventory

Niche ad space that won’t get many

views but might be perfect for a targeted campaign, and will probably be cheaper.

A/B testing

Testing of different ad versions to see

which performs the best.

Programmatic direct

Buying and selling of media at a set

price, but using programmatic tech. Gives the buyer more control of price.

Real-time bidding (RTB)

Near instant auctioning of ad space as a

relevant visitor hits a web page. Allows you to target your audience in real time.

Second party data

First party data that you buy from someone else.

Supply-side platform

Just like a DSP, but used by publishers to automatically sell ad inventory.

Third party data

Data that isn’t actually based on your audience. Often modelled from an exter-nal data set.

User attributes

Information about your audience that allows the creation of a target campaign

profile.

Modelled audience

A method that creates a larger sample

by expanding on what you already know from your 1st party data.

Whitelist

A list of websites that an advertiser is willing to place ads.

Impression

A single view of an ad. When a user loads a page with your ad on, that is one impression.

Retargeting

Targeting users who visit your site with

ads on 3rd party websites.

Personalisation

Adjusting ad creative to match the

given audience, grabbing attention and improving conversion.

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There is a lot of jargon in this industry. Luckily, we’re here to decode for you...

Part 1: What? Why? How?

Marketers live in the world of now. Technology and concepts in our field are ever evolving, so its hard to predict what is around the corner with any real certainty.

In this case though, we’re convinced that programmatic advertising is the future. It makes total sense to automate the purchase of ad inventory

with a total focus on the audience that you’re trying to reach. It’s more

efficient, more accurate and it’s targeted to match your goals.

As the internet continues to change, so too will programmatic adjust to move with the times. Ad personalisation is increasingly important if we

want to capture the attention and imagination of users who are

becoming blind to the status quo. Marketers will need to be ever more innovative with their ad creative to maintain a brand connection with their audience, as attention spans dwindle and consumption behaviour evolves.

Most importantly, data optimisation will be key. If you feed an Olympian donuts, they’ll barely reach the start line...

As programmatic tech converges, the key performance differentator will be the successful application of audience insights into the ad buying process.

It’s no longer enough to ‘guesstimate’ your audience - to outperform the

competition, you’ll need to source solid first-party data, and work with people who understand how to apply this to programmatic campaigns.

Finally, we’ll see a greater humanisation of programmatic. At the end of the day, we’re selling to real people, with thoughts and emotions. If we understand this, we can deliver content that speaks to these people, rather than alienate them.

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Illustration

Is programmatic advertising the future?

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