DEFINITIONProgrammatic media buying is a method of purchasing media by utilizing automation tools to gain process efficiencies.
OK, But How Does it Work?
In the following model, our programmatic transaction is represented with three components.
The purchase of programmatic media is done through a licensed software layer called a Demand-Side Platform or “DSP” for short. Much (much) more on this topic in subsequent posts.
In a similar fashion, the publisher (or for simplicity, the website) offers available inventory on their property through software called a Supply-Side Platform. This also helps the publisher with yield management by providing insights into the market value of each placement.
The transaction happens within a digital environment called an Ad Exchange.
What Types of Ads Can be Purchased Programmatically?
Programmatic media comes in many shapes and sizes. Currently, the available media types can be categorized into a handful of groups.
This type of ad is probably the most common of the bunch. Banner Ads also take the most slack for their perceived ineffectiveness. There are a myriad of shapes and sizes for this at type.
Some of the more advanced creative executions even blur the line between media types such as in-banner video or audio. Love them or hate them, this ad format has shown some serious staying power and I don’t expect it to go anywhere anytime soon.
Video ads are quickly becoming the go to choice for many large advertisers. I’m sure you’ve seen these ads before your favorite YouTube clip. The differentiating factor amongst these ads is the duration of the video. The most common being 15 second and 30 second.
You’ll see these preceding content in which case they’re called pre-roll units. Advertisers are also able to purchase (the less desirable) mid-roll and post-roll video ads. Due to the popularity of video ads, quality inventory is limited.
When mentioning video ads, programmatic TV (also called addressable TV or connected TV) also falls under this category. Expect significant growth in this area but for now it suffers from fragmentation and lack of scale.
Programmatic audio ads have been around for some time but are now gaining traction as the technology providers move from a demand-side platform model to an ad exchange or supply-side vendor.
There are still quite a few hurdles to overcome for this medium. One of the primary challenges facing audio ads is measurement. Due to the fact that there aren’t always user actions involved in audio ads, it’s difficult to define goals and objectives.
Because of this, the advertiser must have specific success criteria defined to accommodate the unique nature of audio ads.
One of the newest additions to programmatic media inventory are Native Ads. You may also hear these called content ads.
This ad type takes on the look and feel of the page upon which it is presented. Users who click on native ads are usually taken to a long-form content piece written and presented by the advertiser.
As mentioned under display ads, this ad type also has the ability to support various media such as video and audio.
At this point, it’s worth identify an emerging programmatic inventory source called digital out-of-home. Some very large players are ramping up technology offerings to provide inventory access to a variety of sources such as digital billboards, digital kiosks and any other networked device outside of the traditional laptop/mobile environment.