• July 9, 2020

What is Programmatic Advertising and why to use it

What is Programmatic Advertising and why to use it

What is Programmatic Advertising and why to use it 1024 576 DataLit

If you are reading this article, for sure you have heard the expression Programmatic Advertising and maybe you are wondering about what it truly is.

Programmatic Advertising can be defined as the digital process to optimize advertising activities, thanks primarily to the acquisition of data provided by cookies and pixels. Subsequently, on the basis of the information obtained, the advertising spaces are sold and purchased in an automated manner, thanks to specific technological infrastructure.

Programmatic Adv vs Real time Bidding

It is important to understand the difference between programmatically sold advertising and real-time bidding. The latter is a process similar to continuous auctions: the sellers are publishers/retailers or anyone who has a digital webspace to offer (and a consistent traffic on it), the buyers are advertisers. Automatically, who wants to pay more for that specific space manages to have it. This process is not directly based on data. On the other side, programmatic allows you to automatically reach a specific audience, once you have defined the particular criteria you are more interesting about.

We do not go in details in this article, but we can cite just two well-known criteria:

– Similar Audience: imagine having an eCommerce where a specific customer base transit. Now imagine having the possibility to reach similar audiences in respect to that. This is how the similar audience criteria works and it could be extremely useful to optimize retargeting activities.

– Category targeting: thanks to this method, if you are an advertiser you can simply reach those websites similar for content/topics, in order to engage a specific interested audience. For example, if you sell sport products, you can decide to invest in advertising spaces of sport blogs.

There are other criteria, such as Contextual Keyword, Affinity targeting and so on.

Once defined programmatic, in this article we will try to understand how it works, which problems it can solve, and which platforms could be used to deal with it.

How does programmatic advertising works and why to use it?

According to a recent estimate, programmatically sold advertising was worth 106 billion U.S. dollars in 2019. The projections for 2020 say programmatic ad spend will reach 127 billion dollars and further grow by 20 billion by the end of 2021.

Those numbers give us an idea of the phenomenon. Why is programmatic more and more used? Simple answer: it optimizes advertising costs. The famous quote Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” (J.Wanamaker) can be not true anymore.

At the end of the day, programmatic advertising is a truly data-driven way to enhance your advertising activity. Combining data, target analysis and real-time actions, not only you maximize your conversion rate, but you also improve your brand reputation. Why? Simply because the users are more interested in your content: in most of the cases, the advertising is not useless and annoying anymore.

While the machine is occupied to understand how to reach the perfect audience, human beings can spend time in high value-added activities, such as the creation of attractive and suitable banners.

Programmatic advertising platforms

Even though we have defined programmatic advertising in a unique way, we can actually use different types of platforms to perform it.

The main types of AdTech platforms are the following.

  • Ad Server: this platform can be used by publishers, ad agencies, ad networks and advertisers to manage digital advertising campaigns.
  • Supply-side platforms: it is the platform mainly used by publishers, to manage the ads they can insert in display, video and native formats, in order to monetize their websites.
  • Demand-side platforms: this platform is used by advertisers and ad agencies to buy ad spaces from multiple publishers.
  • Data Management Platform (DMP): this well-known technology allows publishers to collect, store and organize data, in order to view reports about their audiences and offer them to advertisers.
  • Ad Network: an Ad Network is basically a technology characterized to be the intermediary between publishers and advertisers. It gathers advertising ad spaces from numerous publishers, it splits up different audiences and it places on the market through an auction mechanism.

DataLit.AI: an AI-powered Ad Network

As we have seen, the Ad Network is a very interesting technology but, obviously, not all the Ad Network is the same. When you are about to choose and Ad Network, there are critical points to evaluate.

One important point is the network: how many advertisers and publishers uses it? The second point is technology: which kind of advertisement formats it can manage and which methodologies and algorithms the Ad network uses. DataLit.AI, the Ad Network offered by the tech company PaperLit, revolutionizes the programmatic strategy using Artificial Intelligence algorithms to analyze the audience, enhance predictive analytics and hyper-profiling.