Programmatic advertising
Consumer Insights | 3 min read

What is Programmatic Advertising? 

by Bench August 17, 2015

A Working Definition of Programmatic Advertising

Programmatic advertising has completely modified the way in which we advertise online. Nonetheless, there is still some uncertainty about what Programmatic Advertising actually is, and how it all works. Here is an easy-to-follow guide on Programmatic Advertising in all its glory.

What does Programmatic Advertising mean?

When you advertise programmatically, it simply means that you are using software to buy the digital ad space. This is very different to how ads have traditionally been purchased in the past, such as through Request for Proposals (RFPs), negotiating with trading desks and publishers, or making an order manually. In essence, programmatic advertising involves using an engine to purchase ad space.

Why is Programmatic Advertising important?

Importantly, it is faster. Before the rise of Programmatic Advertising, people like salespersons and ad buyers carried out the purchase and sale of online ad space. Not only is this method slower, and arguably less reliable, it is certainly less cost-effective.

The technology behind Programmatic Advertising sets out to simplify and streamline the process and system of buying ads. Its efficiency and mechanical nature means it is less expensive to run the ads. While people can have days where they’re not on their ‘A’ game, a machine performs to the same standard, day in, day out.

Does Programmatic Advertising replace Ad buyers?

The answer to this question is two-fold. Technological advancement in this space means certain tasks in the ad-buying process have been made redundant, such as communicating insertion orders with publishers and managing ad tags. That said, people are certainly indispensable insofar as managing the campaign’s optimization and underlying strategy. As Programmatic Advertising features more and more prominently in the repertoire of the everyday marketer’s toolkit, there will most probably be a decrease in the number of ad buyers. Nevertheless, it could also mean that future sellers and marketers will have more time to plan comprehensive and tailored campaigns, and less time spent on the red tape that ties up the process itself.

How is Programmatic Advertising different to Real-Time Bidding?

Essentially, Real-time bidding (RTB) is one way of carrying out Programmatic Advertising, but there also others. RTB involves buying ads at auction in real time. Another advantage in buying programmatically is that the purchaser can set how many ad impressions it wishes to purchase from the publisher. Sometimes this way of purchasing is called “programmatic direct”.

Will Programmatic advertising become the primary form of advertising for businesses?

Based on industry research and projections, we’re already nearly there.

Though it’s difficult to know what percentage of advertising is programmatic, it is certainly becoming increasingly popular. There are agencies looking to buy programmatically, and large advertisers who are now implementing in-house solutions to meet their programmatic needs. As it stands, the primary method of Programmatic Advertising is conducted online. That said, media companies and ad agencies are now looking at ways of using this method to sell traditional media, like television or out-of-home advertising.