Get with the Program: Programmatic Advertising

Digital advertising spending has increased and will continue to do so as our world continues to digitalize. Programmatic advertising is a profitable avenue for both marketers and web publishers. Let's take a look at the ad-tech industry and programmatic advertising!

What is ad-tech and programmatic advertising?

Ad-tech or advertising technology is the umbrella term for the software and tools that help agencies and brands target, deliver, and analyze their digital advertising efforts. Ad-tech is highly profitable, and represents about 90% of all advertising costs (HubSpot). The main purpose of ad-tech is to help marketers deliver their content to the right consumers at the right time, making marketing more time and cost efficient.

Programmatic advertising is an ad-tech method that breaks away from traditional advertising strategies in its use of automated technology and algorithmic tools for media buying. The term programmatic relates to the process of how ads are bought and sold in the advertising space. With programmatic advertising, marketers can essentially buy access to their target audiences.

DSP and SSP

Supply-side platforms, or SSPs are an ad-tech platform that allows publishers (typically web or app developers) to manage, sell and optimize available inventory (aka ad space) on their websites and mobile apps in an automated and efficient way. By using an SSP, publishers can show display, video and native ads to their visitors, and monetize their website and apps. Publishers that utilize use an SSP have the ability to maximize their profits with their available ad space.

Demand-side platforms otherwise known as DSPs is apart of advertiser's/purchaser side of ad-tech. A brand and its advertisers can use DSPs to set up their campaigns and define their terms for maximum bids, budget caps, the target audience parameters and, their campaign goals. Advertisers that utilize a DSP have the ability to buy ad impressions in a cost-efficient way.

How does programmatic advertising support website publishers?

Programmatic advertising is a highly profitable avenue for website publishers. With programmatic advertising, publishers can efficiently sell their available ad space for a high price, increasing their profits. Not only is this financially beneficial for website publishers, according to ADvendio there are other benefits of using programmatic advertising such as:

• Having a simple platform to sell advertising space on.
• Collaboration opportunities between advertiser and publisher.
• User relevance due to the demographic targeting capabilities of programmatic placement.
• Efficient sales and placement.

The challenges of programmatic advertising

While programmatic advertising proves to be beneficial to both advertisers and publishers, this advertising method does come with challenges. The largest challenge of programmatic advertising is digital advertising fraud, which is where buyers are essentially tricked into paying for ads that they don’t actually get. While there are basic protocols that can eliminate the likelihood of this risk such as ADS.txt, advertising fraud caused the loss of approximately $6.5 billion in 2017 (MNI Targeted Media).

Other challenges of programmatic advertising were outlined by Bannerflow such as:

• Lack of knowledge.
• Inventory quality.
• Ad creativity.
• Brand safety.

These challenges all have solutions such as research and utilization of reliable and trustworthy DSPs. Programmatic advertising is still maturing and hasn't reached its full capabilities, but can help brands flourish! As the digital marketing world continues to change, so will programmatic advertising.

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