Glossary
Programmatic advertising
Programmatic advertising
Programmatic advertising automates the buying, placement, and optimization of online advertising through real-time bidding and using demand-side platforms (DSPs) and supply-side platforms (SSPs).

What is programmatic advertising?

Programmatic advertising automates the buying, placement, and optimization of online advertising. Instead of the traditional method of manually negotiating and purchasing ad space through sales representatives, programmatic advertising allows the use of software to purchase and display ads in real time, using data and algorithms to target specific audiences and optimize ad performance. This approach allows for more efficient and effective use of advertising spend and the ability to quickly adjust and optimize campaigns based on real-time data.

How does programmatic advertising work?

The first step in programmatic advertising is to gather data on your target audience. This data can be obtained through various methods such as website analytics, surveys, and third-party data providers. Then, the data is used to create a target audience profile, determining which ads will be shown to users.

Once the target audience profile is created, purchasing ad inventory is next. The purchase of the ad inventory is done through real-time bidding (RTB), where advertisers bid on ad space in real time through an auction-based system. Advertisers use demand-side platforms (DSPs) to participate in the RTB process. A DSP is a software platform that allows advertisers to bid on and purchase ad inventory from multiple sources in real time. It is connected to various supply-side platforms (SSPs), representing the inventory from different publishers' websites, apps, and other digital content providers. A SSP, on the other hand, represents the supply side of the equation. It allows publishers to manage and sell their ad inventory programmatically. A SSP is connected to multiple DSPs, and through the real-time bidding process, it allows publishers to sell ad inventory to the highest bidder.

Once the ad space is purchased, the ad is displayed to the targeted audience. Programmatic advertising also allows for the optimization of ad campaigns in real time. Advertisers can quickly adjust their campaigns based on real-time data and performance metrics to improve the effectiveness of their ads.

Why is programmatic advertising important?

Efficiency

Programmatic advertising allows for the automation of the ad buying process, making it more efficient and cost-effective than traditional methods. It eliminates the need for manual negotiations and allows data and algorithms to target specific audiences and optimize ad performance.

Targeting

Programmatic advertising allows for more precise targeting of audiences. By using data and algorithms to analyze consumer behavior, programmatic advertising can deliver ads to the right people at the right time, increasing the chances of conversion.

Real-time optimization

Programmatic advertising enables real-time optimization of ad campaigns. Advertisers can quickly adjust their campaigns based on real-time data and performance metrics to improve the effectiveness of their ads.

Scale

Programmatic advertising allows for the scaling of ad campaigns. Advertisers can use programmatic to buy ad inventory from multiple sources, reaching a wider audience at a lower cost.

Automation

Programmatic advertising helps automate repetitive tasks that humans would otherwise have to do, freeing up more time for strategy and creativity.

Programmatic advertising has revolutionized how ads are bought and sold. As the industry continues to evolve, programmatic advertising is becoming an increasingly important tool for advertisers to reach their desired audiences and achieve their marketing goals.

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