Programmatic buying is arguably one of the most exciting trends to emerge in digital marketing in recent years.
A brief history of buying advertising space
In the days prior to digital marketing, advertising space was generally priced according to a range of (generally fixed) criteria such as number of letters and font or time slot and duration. Even then, however, discretion could be exercised if there was space to be sold close to the relevant deadline. With the advert of digital marketing, it became possible to sell advertising space by auction, literally in the time it took a webpage to load. This is the basis on which Google Adwords operates (although it does look at other criteria as well) and programmatic ad buying is essentially the same idea, but applied to display advertising.
Direct Sales Platforms – the key to programmatic buying
Direct Sales Platforms or DSPs are pieces of software programmed with the variables which are of interest to their user. They bid on advertising space in accordance with a set of pre-defined instructions. This completely eliminates the need for human intervention (and thereby removes the possibility of human error) and frees up valuable human resources for more productive tasks.
More data = better buying decisions
Programmatic buying is driven by data. This means that as more (and better) data becomes available, the buying algorithm can be adjusted to take it into account. In very simple terms this means that changing programmatic-buying strategies is like turning on a sixpence, whereas in the old days changing advertising-space-buying strategies was much more like turning a giant ocean liner.
Cross channel advertising – the next step in programmatic buying
Although programmatic buying is still mostly associated with the internet, it is now begin adopted by other media, in particular TV. This could open up exciting new opportunities for advertisers. For example it could make it possible to follow a specific prospect across different media and to send them highly-targeted adverts a appropriate points. There are, however, still issues to be solved before this option goes fully and effectively mainstream. One of these is that this strategy can only work if a single user can be followed effectively across a number of devices including non-traditional ones such as mobile devices, games consoles and smart TVs. At current time, there is still a long way to go before this comes close to being a reality, although the social media networks in particular are working hard to make it happen.
In the meantime there’s more available than just banner ads
While programmatic buying started out essentially as a means to buy space for banner ads, it is now being used as a way of buying (and selling) other types of adverts. This is good news for everyone as it makes life quicker and simpler for both sides and provides great value.