In the last couple of years, the marketing landscape has undergone a significant transformation. New trends are constantly emerging, and businesses are questioning which marketing strategies still deliver results. While some methods fade and others gain momentum, programmatic advertising remains a powerful and efficient solution.
Programmatic advertising is an approach to digital ads that uses automation to buy and sell ad space efficiently. Unlike traditional advertising, which involves proposals, quotes, and negotiations, programmatic relies on algorithmic software to streamline transactions and consolidate digital ad efforts into a single platform.
Machine learning is an inseparable part of programmatic advertising. Analyzing vast amounts of data significantly improves campaign success. Also, it enables real-time optimization by assessing campaign inputs, user behavior, and audience dynamics to target those most likely to convert.
However, the process isn’t entirely automated. Marketers still play a role in tasks like preparing insertion orders and ad tags.
Investments in programmatic advertising continue to rise. According to the EMARKETER research group’s forecast, programmatic digital display ad spending will grow three times as fast as nonprogrammatic ad spending.
Let’s take a closer look at what programmatic advertising is constituted of.
The programmatic ecosystem consists of various technology platforms, advertising deal types, and methods for buying programmatic media across different ad formats. These components work together to enable a seamless and automated media buying process.
Each programmatic platform is typically owned and operated by a publisher, advertiser, or intermediary. Let’s explore the key components of this ecosystem.
The key difference between Ad Networks and Ad Exchanges is that ad exchanges operate purely through automation, while ad networks may involve some human management.
In the programmatic ecosystem, ad inventory can be bought and sold in different ways, each with its advantages and challenges. These deals generally fall into two categories: Real-Time Bidding (RTB) and Programmatic Direct.
Let’s explore each type in more detail.
An open auction is accessible to all advertisers via an exchange, SSP, or ad network. Publishers set a minimum floor price, but the final cost is determined by demand, with the highest bid winning the ad placement.
Pros: High reach, cost-effective, and scalable.
Cons: No guaranteed inventory, blind bidding risks (publishers may not know who buys their inventory, and advertisers may not fully control where their ads appear).
A private exchange is an invitation-only auction where publishers offer ad inventory to select advertisers. Marketers receive a time-sensitive deal ID to participate in the bidding.
Pros: Greater transparency, better brand alignment, and improved user experience.
Cons: Inventory is still not guaranteed.
In preferred deals, publishers offer premium inventory at a pre-negotiated fixed eCPM price. Advertisers have the first opportunity to bid on premium ad space before it enters an open auction.
Pros: More predictable pricing, access to high-quality placements, and reduced competition.
Cons: Inventory is not guaranteed, and advertisers must commit to a fixed price.
As the name suggests, programmatic guaranteed deals ensure a fixed number of impressions at a negotiated price between the publisher and advertiser.
Pros: Guaranteed inventory, full transparency, and brand safety. Advertisers know exactly where their ads will appear, and publishers control the content shown on their platforms.
Cons: Less flexibility compared to auction-based deals.
Combining the programmatic deals makes cherry-picking possible and therefore allows for getting the most out of the campaign in terms of performance and/or price. That is why Adello combines different types of programmatic deals.
Before specifying which programmatic deal type to use, Adello would have to define the ad campaign goal. If the aim is to reach out to the new audience, learn their behavior, and open new opportunities to push your brand awareness – an open auction would be a suitable option.
Adello buys most of its traffic through open auctions. Open exchanges have millions of different publishers, providing an opportunity to advertise the product to the masses. One of the main benefits Adello provides to its clients is near real-time intermediate campaign reporting. Using the Adello Direct reporting dashboard, advertisers can assess their campaign performance and readjust different targeting options, thus targeting a more precise audience. Adello Direct allows narrowing audiences based on their location, interests, demographic features, etc.
If no inventory is available through the open market and Adello doesn’t have to fulfill advertiser preferences for a specific publisher, Adello chooses preferred deals. Such deals negotiate the preferred price but don’t require securing the inventory. That way, Adello can buy the traffic needed or fit it to an agreed-upon price or pass it on if there is better matching inventory or price somewhere else.
However, some publishers sell only a part of their inventory on open markets or don’t sell there at all. If Adello needs to secure the inventory of those specific publishers, we use a private marketplace.
Programmatic guaranteeing is the most favorable option for most publishers since they can sell a guaranteed amount of inventory at a fixed price. Adello uses this type of programmatic deal in 2 cases: 1) if the advertiser asks for a specific publisher, or 2) if inventory shows a good performance for a reasonable price.
Programmatic advertisement is a deep and quite compelling method of marketing. Knowing how programmatic works allows marketers to make more informed and data-driven decisions. The information provided in the article is only a basic foundation of the programmatic ocean. Nevertheless, Adello is always glad to share valuable insights about marketing and answer your questions.
