Programmatic or automated ad buying typically refers to the use of software/machines to buy digital advertising, as opposed to the traditional process that involves RFPs, human negotiations and manual insertion orders. It is growing not only because it makes ad transactions more efficient but because if the right data is applied, it can make them more effective.
How it works?
Basically multiple firms engage in real-time bidding for display ad space on a webpage. The information about the availability of ad-space on a webpage is passed onto an ad-exchange. An ad exchange is a platform that auctions off the available ad space to the highest bidder. The highest bidder gets to have his page displayed when the page loads.
A Supply-Side Platform (SSP) is a software system that allows web publishers to sell and manage ad inventory in an automated manner. SSPs connect with multiple ad networks and DSPs at once providing access to a large number of potential ad buyers.
Advertisers typically use demand-side platforms (DSPs), a fully automated software, to select which ad space to purchase. This eliminates to an extent the need for sales personnel and time spent negotiating, insertion orders etc. making the process highly efficient.
A video explaining the process
It is all about Data!
Data regarding which geographies to target, time of day, audience segments etc; is all fed into the DSPs so that ads are extremely effective in targeting.
Everyone is jumping on the bandwagon!
Recently, Dannon entered into a one year contract with video vendor TubeMogul to focus on ad targeting while also automating a portion of its buying. One of the first outputs of the deal was a campaign for Activia, a line of yogurt that helps with digestion, that was rolled out to a very narrow segment of people based on their age and gender.
Sources
- http://www.emarketer.com/Article/US-Programmatic-Ad-Spend-Tops-10-Billion-This-Year-Double-by-2016/1011312
- https://hbr.org/2015/06/is-programmatic-advertising-the-future-of-marketing
- http://adage.com/article/print-edition/10-things-programmatic-buying/298811/
- http://www.adweek.com/news/technology/why-dannon-betting-big-programmatic-video-167802
- http://www.adweek.com/news/technology/small-or-large-brands-are-betting-big-programmatic-ads-holiday-season-167751
Ankita Verma
Shikhar Nigam
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