Everything you need to know about programmatic advertising

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Everything you need to know about programmatic advertising

Digital advertising is experiencing a major boom in recent years. Entrepreneurs have realized that conducting digital campaigns is much cheaper and more profitable than traditional advertising. Year after year we see how the investment in digital advertising increases and there is something more than Google Ads and Facebook Ads. In this article I am going to talk about programmatic advertising, a fully automated printing purchase system that is interesting to know to have more alternatives.

What is programmatic advertising?

Programmatic purchase refers to the automated acquisition of advertising spaces in the network. Through big data the segmentation of the audience is carried out, thus directing the publicity to the appropriate public.

How does it work?

It uses a system based on algorithms that establish common parameters between the different spaces that are for sale on the internet and the data that advertisers have regarding their target audience.

In this way, users receive advertising based on their interests and tastes, all this in real time. That is, you just looked at clothes in Mango and you see ads of just the clothes you’ve looked at, do you believe in coincidences? What causes that the needs or desires of the users are closer to the purchases, resulting in an increase in quality traffic.

How is such a high success rate possible?

There are several platforms and tools that make it possible for the programmatic purchase ecosystem to work so well:

  • Demand Side Plataform: platforms used by advertisers where they specify the parameters that will define their purchases. This type of platform is where the bids are made in real time, being essential since it is automating a procedure that was previously done manually. The most famous DSP platforms are MediaMath, DoubleClick, DataXu and Cadreon.
  • Sell Side Platform: This is where we will find the offers available from the different media. Thanks to the ease of managing the different inventories of publishers, it is possible to maximize the revenue received from brands.
  • AD Exchange Platform: This is the link between the DSP platforms and the SSP platforms, that is, it is responsible for putting sellers in contact with buyers. There are two forms of Ad Exchanges:
    • Open bid: any buyer can bid for ads.

    • Private bid: in this case sellers only want a number of buyers. For example, it is very common in newspapers to see many car ads, it is no accident.

  • Data Management Platform: It is responsible for centralized data management. Its purpose is to help advertisers define their target audience based on all data from different platforms. Normally it works with:
    • 1st party data: advertiser’s own data. They are usually picked up through their website, their CRM platform, social networks …
    • 3rd party dada:data from sources external to advertisers. These are mainly socio-demographic data, such as age, sex or location.
  • Trading Desk Platforms:These are the platforms used by different agencies and companies to automatically manage the purchase of advertising.

ecosistema de la compra programatica

*IAB Spain

The periodic table of the elements of the programmatic purchase

Due to the complexity of knowing all the factors and elements involved in this process, several of the most important platforms decided to create a periodic table, which groups the elements into five blocks.

  • Inventory:

    • Markets

    • Types of inventory

    • Devices

  • Platforms:

    • Filters

    • Bells

    • Targeting

    • Location

  • Creativity:

    • Type

    • Format

  • Data Targeting:

    • data Demographic

    • dataIntention data

    • Data of interest

  • Goals:

    • Scope

    • Clicks / Engagement

    • Installations

    • Contacts / Sales

    • Visualizations


Know your advantages

You know how much I am in favor of campaigns in digital media compared to traditional ones. In this case I will indicate the main advantages of programmatic advertising, from my point of view.

  • Segmentation: thanks to the algorithms that take into account both the profile and the behavior of the users, we can more easily reach our target target.
  • Simple: although there are a lot of actors in this process, they are all gathered under a single channel. In addition, human intervention is minimal, saving time, work and money.
  • Media reach: more and more media are turning over all their advertising space on the platforms, greatly increasing the offer. In addition, if we wanted to make the purchase manually, one by one, it would take us forever.

Programmatic purchase in numbers

In 2018, programmatic spending accounted for 20% of the investment in digital advertising in Spain, far from the 50% that reigns across the European continent. Although these figures are ridiculous if we compare it with the 78% it represents in the United States. However, it is estimated that this year 2019 in Spain will reach 25% of digital advertising spending.
An investment of 84.9 billion dollars worldwide is estimated during this year, an increase of 21% compared to 2018. Although Spain is far from European leaders such as France, Germany and England, according to the latest study on investment IAB digital media advertising there is a notable increase in investment in digital advertising, as can be seen in the following image.

inversión digital españa

Do I have to invest in this type of advertising?

The big difference between the programmatic purchase and the classic display is that with the first you reach almost 100% of the inventory available on the internet, while with Google Ads for example, you only reach 65%. First, it is a more difficult and unknown type of advertising, but the results are better than with the generic display. From my point of view it is always interesting to try the different types of existing campaigns, since you never know which ones will work with your company or with your objectives.

I trust that in this article on programmatic advertising you have learned a little more about this modality, which is much talked about, but most people group within the category of classic display. If you have any questions or experience regarding this topic, I will be happy to read it in the comments.

See you in the next article!

José Alvargonzález

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