Programmatic. It’s a word that’s been thrown around on the internet a lot recently, with headlines that it’s the next big thing in 2015 – it’s already taken Sweden by storm – and the Association of National Advertisers titling it their 2014 Word of The Year. But nobody really seems to know what it is. So here at Exaget we’re going to de-mystify ‘programmatic’ and its relative ‘RTB’ (a.k.a Real Time Bidding) with our ‘Dummies Guide’.
In one sentence, programmatic advertising is a technology that allows advertisers to automatically target consumers based on certain qualifiers, such as location, age, and gender, referred to as ‘smart impressions’. (We’ve got a little handy glossary at the end of the article).
Programmatic is ad buying that is processed by a machine, cutting out the need of a human middleman – the sales rep – and his juicy commission. With the smart impressions programmed in its mind, the machine is able to find inventory spaces that are suited to the advertiser’s targeted audience. The next step is for the advertiser to then decide whether or not they want to buy this inventory from the publisher. Now, if you’ve come across RTB – Real Time Bidding – then this is where it comes in.
With programmatic being a method to determine if an advertiser wants to purchase their inventory space, RTB is a way of purchasing it, through real-time auctions. The old-fashioned – that is to say, pre-2009 – way of advertising was based primarily on assumptions; assuming where the target audience is likely to be and what they’d be likely to be doing, and sending their ads there en masse, with the hope that the advertiser’s audience will match the publisher’s.
In contrast, real time bidding is about high volume and precision targeting, by seeing what the target audience is doing now and where. This allows advertisers to buy impressions that directly target individuals.
Programmatic is taking off in a big way. In Sweden nearly 90% of publishers will make their inventory available for programmatic buying. Meanwhile, the UK is to retain its status as Europe’s biggest market for programmatic ad spending; a study by the International Data Corporation forecast earlier this year that the UK’s programmatic ad spend would reach up to $320 million. And American Express, one of the largest online display advertisers in the US, are planning on becoming as programmatic as possible.
There is one little glitch that’s holding programmatic back, and that is quite simply that many either haven’t heard of it, don’t understand what it is, or don’t know how to use it or what exactly it does. But with its growing popularity there are bound to be more articles, webinars and studies to clear away any confusion.
The team at Exaget are excited to keep an eye on programmatic and its impact in the New Year – and ‘dummify’ anything you might not understand for you!
If you are interested in becoming a broadcasting partner, or would like to know what our integrating technology can do for you, contact our Partnership Account Manager Matthew Layton – firstname.lastname@example.org or +447533517396
If you are interested in advertising opportunities, please contact the CEO of Exaget, Shankar Meembat –email@example.com or +447411130680
Glossary of Terms:
Smart impressions : Ads placed in a targeted audience segment. E.g. for audio smart impressions, that means ads placed in the ears of listeners who have been qualified as the targeted audience. The most common qualifiers are location, age, and gender.
Programmatic : A big and scary word that’s too easily misunderstood. Ad buying that is processed by a machine, using automated programmed smart impressions. A method that allows advertisers to target consumers, with the machine finding suitable inventory spaces.
RTB : acronym for Real Time Bidding. An auction-house style of buying and selling consumer-targeted inventory spaces. Looks at what the targeted audience is doing now – in real time.