Put simply, programmatic advertising is an automated approach to buying and selling digital ad space. The market for digital advertising space is run by ad exchanges, where algorithms handle the sale and placement of digital ads.
Advertisers: those looking to buy online ad space
Publishers: those with digital space to sell
Before programmatic media buying, advertisers negotiated contracts with publishers in person. Now, the entire process of buying and selling ads is automated and happens in milliseconds.
How Does Programmatic Advertising Work?
Advertisers looking to buy ad space use a display-side platform (DSP) to enter bid amounts, audience-targeting information, and ad content. The platform then finds ad space that offers the lowest cost for the most targeted impressions and places bids in an ad exchange.
Agility's self-service DSP gives advertisers full control over their campaigns.
Website publishers looking to sell ad space use a supply-side platform (SSP). SSPs allow publishers to maximize revenue by simultaneously connecting their inventory to multiple ad exchanges and demand-side platforms.
Here's a break-down of the process:
A person clicks on a website
The website owner puts the ad impression up for auction (SSP)
Advertisers bid for the impression (DSP)
The highest bid wins
The ad is served on the website
The person clicks on the ad
All of this happens in less than a second. Also, bids are calculated by a host of analytics that automatically determine the most cost-effective offer. For instance, if the person who opened the website is a strong potential customer, based on their web-surfing history and online profile, the bid required to win the impression will be higher.
Advantages of Programmatic Advertising
Programmatic advertising gives advertisers and publishers everything they want. Advertisers get enormous reach and high engagement. Publishers maximize revenue by getting more competition around their ad-space inventory and leaving less of it unsold.
Publishers can serve more local and personalized ads which both improves customer relationships and increases the number of impressions.
Programmatic advertising and real-time bidding have revolutionized the way digital display, video, native and audio advertisements are bought and managed. Advertisers can now instantly connect to target audiences across millions of websites, connected TV’s, newsfeeds and streaming audio platforms.
For more information about how Agility's programmatic can help your business, reach out via the chat feature.