Let’s begin with a definition. Programmatic is defined as “the nature of or according to a programme, schedule, or method,” basically any automated system or process. The buying and selling of media have increasingly turned towards programmatic technology in recent years because it gives marketers the ability to get messages out to the correct consumers in real time.
A huge part of marketing is understanding your audience and what they want from a product. Programmatic buying facilitates this process. Before programmatic buying, it was hard to gauge the success of digital marketing campaigns. Now, you have access to who is searching for your product or service, how many people your marketing campaign has reached, and you can get an idea of your competition.
How does programmatic buying work?
Leaving the technical stuff to the experts, here are the basics that marketers need to understand about programmatic buying:
Publishers store data about each person that visits a website. With this information, a programmatically produced advertisement is published in the open ad space on the website through a complex system of ad exchanges, supply side platforms, demand side platforms, and ad networks. When the winning advertisement is published, marketers and advertisers receive data about the person who is viewing the advertisement.
Programmatic buying may sound expensive, but marketers can set their bid price for advertising space. The bid price is the amount of money that you are willing to spend for your advertisement to be posted in a specific ad space.
Set your prices based on the competition. While, in some cases, you might have to raise your bid price, you now know more about your competition. Using this third party data, ad spaces can be cherry picked from the competition to optimize impression levels for your campaign.
Using behavioral and audience data, marketers can specify network reach so that they are only paying for ad space that will reach a specific audience. Marketers can collect this data though winning advertisement spaces, as discussed in the first point.
Potential marketing opportunities emerge when you have access to all of this information. As a marketer, you can now structure your campaigns around the audience that you want to reach. You have access to return on investment, making sure the amount of money that you are spent is worth the price you paid. If all of this is done correctly, marketers can save money on advertising.