Programmatic Advertising – What It Is and How It Works

04 Aug
Programmatic advertising

If you’re a digital marketer you’ve probably heard of programmatic advertising from an agency, blog post or conference. And it’s no wonder – 65% of all money spent on advertising in digital media in 2019 will be traded programmatically, according to Zenith’s Programmatic Marketing Forecasts. Programmatic advertising is slowly cementing its position as the most important method of digital trading, gaining a dominant share of digital media transactions as it improves it’s efficiency.

What is programmatic advertising?

Simply put, the algorithmic purchase and sale of advertising space in real time. During this process, software is used to automate the buying, placement, and optimisation of media inventory via a bidding system. Automating the process means that it can be done in real time and doesn’t rely on the human touch, manual insertions and manual trading.

How does it work?

When a webpage is being loaded and has the space for an advert on it, information that’s been gathered about both the user/visitor and the context of the site or webpage its being loaded to, is sent back and forth to an ad exchange and the ad is placed on that page. This space gets auctioned off to the highest bidder and their ad is placed in the space – all of this is done in milliseconds with no apparent detriment to page loads times or user experience.

Real-time bidding (RTB)

With real-time bidding, the process of placing an ad involves a publisher, a supply-side platform, a demand-side platform, and an advertiser. First, with a supply-side platform, publishers offer up access to an audience in the form of ad inventory — space on their web pages where an ad can be served to a visitor. Then, on an open marketplace, advertisers bid to reach that audience or demographic. Space is won by the highest bidder during an auction and once an internet user clicks a link, the auction begins.

Programmatic advertising is definitely at the heart of marketing right now. Get yourself up to date with all the online marketing news by joining our next courses.

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