There’s been a lot of talk about the direction that digital ad buying has been taking in the last couple years. Namely, the use of Programmatic software to buy digital ads.
What Is Programmatic Buying?
Back in the 90’s, online ad space was bought directly by ad agencies from publishers. As time progressed, networks began aggregating their inventory to sell to advertisers. Now we have entered a new era of “Programmatic” buying, where software is used to automate the buying process. It is projected to account for 50% of digital ad sales by 2018.
One of the biggest forms of Programmatic buying is the real-time bidding (RTB) software. This is software that allows you to automate the process of bidding for ad space on a publisher’s website. This is what we will be talking about today.
How Does It Work?
Essentially, when an ad begins to load on a website, an extremely fast auction is about to take place. Lets say that a website has 100 advertisers that want to put their ads in the sidebar. A user (lets call him John) clicks on the website and begins loading it. As the site begins to load, a decision must me made as to which of the 100 ads gets put into the sidebar (as there can only be one).
In order to choose the ad, a micro-auction is held to determine who gets the spot. John’s information and the information of the page he is on get sent to an ad exchange, which auctions it off to the highest-paying advertiser. The winner gets their ad on John’s screen. All of this happens in a matter of milliseconds.
RTB software automates this process by only choosing ad space that is relevant to the advertiser (based on user information). This ends up saving money and making everything more efficient.
The Benefits
Programmatic ad buying takes care of a lot of the human error associated with ad buying. Normally humans would have to send insertion orders to publishers an, but this method uses artificial intelligence and real-time bidding to automate the ad buying process.
It also saves advertisers money because their ads are only shown on sites that are relevant to the users they’re targeting. This makes for campaigns that have more impact, as there is much lest ‘wastage’.
Programmatic buying is growing fast, so if you haven’t started looking at using its software, now is the time!
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