Ad Tech & Programmatic: Master the online media tech and programmatic media explained: Online marketing platforms explained to understand the evolution ... ecosystem (eBusiness Books Book 4) by Julian Delphiki

Author:Julian Delphiki [Delphiki, Julian]
Language: eng
Format: azw3
Published: 2020-05-03T16:00:00+00:00

Part II

Programmatic

Understanding programmatic

Programmatic’s a pretty big topic in the marketing world, and it’s likely that you’ll at least have heard it mentioned before - but what does ‘programmatic’ really mean, and how has it evolved over time?

These chapters will give you a solid understanding of how and why programmatic has become such an integral part of the way ads are bought, sold and targeted.

4.1.

The evolution of Programmatic

First things first: what does the term programmatic actually mean? It can seem complicated, but really programmatic is just a word for the automated buying and selling of media space. In other words, it’s just another way of trading ads, using technology and automated bidding processes rather than going directly to the media owner and brokering a deal. Programmatic trading is used to make the buying and selling of ad inventory more efficient for all parties involved, because it cuts out the lengthy negotiations between advertisers, media agencies and media owners.

So that’s what programmatic actually is. What sometimes confuses people is the technology that makes programmatic work. There are various technological components that work together to make programmatic trading possible, and they didn’t all arrive on the scene at the same time. The advertising landscape used to look very different to the one we’ve got now. To explain how it all came about, we’re going to take you back to a time before programmatic existed at all…

Media owners need to sell as much of their ad inventory as possible in order to make their sites profitable. Typically, their inventory can be broadly divided into two categories: premium inventory, which sits on the site or section home pages and is seen by lots of users, and remnant inventory which is located on the less frequently visited pages of the site, or in less prominent positions on a page, and so in the past these ad spots tended to command a pretty low value, or even went unsold.

However, this remnant inventory accounts for the vast majority of total ad impressions on a site – so, when bought in bulk, it’s actually of significant value to advertisers and media agencies. Media owners recognized this, so they banded together to form ad networks: basically, just groups of sites who packaged up and sold their remnant inventory in bundles.

This helped for a while, since buyers were able to buy scaled propositions much more easily than before. However, soon there were so many ad networks in the market that buyers found themselves struggling to figure out which one to turn to for the best inventory at the best price. They realized they needed a way to identify and purchase the right inventory – one that didn’t involve a team of people sitting at screens, contacting media owner after media owner looking for the best deal. And media owners realized they needed a method of communicating their available inventory to as many potential buyers as possible, maximizing the price of their impressions without the need to negotiate with the ad networks. These requirements formed the foundation of the programmatic trading model that exists today.

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