Unpacking the tech behind programmatic buying

“Programmatic buying platforms” was the “buzz phrase” of 2014 within the digital advertising landscape. This article unpacks some of the terminology and tech around programmatic buying.

Programmatic buying is a way to fully automate the often complex processes that advertisers must consider when purchasing display , mobile and more recently, native ads. The term covers a wide range of technologies that automate the buying, placement and optimisation of advertising. One of the major components of programmatic buying is real time bidding, or RTB. With RTB, a buyer can, in a real-time auction environment, set parameters such as bid price and network reach for every impression they buy. With programmatic buying, these parameters can also be layered with further behavioural or audience data, ensuring the best possible yield optimisation for publishers.

While RTB and programmatic buying are associated, they are not exactly the same thing. RTB refers to the auction based sales process that can be used between buyers and sellers in open or private ad exchanges, whereas programmatic buying refers to the automation of the buying process and can apply to a direct (programmatic direct) or exchange-based buying (programmatic RTB).

RTB is the technology layer within the programmatic buying platform that allows advertisers to target consumers based on their recent online behaviour across the web by plugging into a wide range of ad networks, ad exchanges and sell-side platforms (SSP’s) . Programmatic buying gives the marketer the power to include a large number of variables when booking their campaigns, and this list of variables is growing constantly. This allows the advertiser to calculate the return on investment for the campaign almost immediately, and makes it possible to adjust the parameters of the campaign quickly if necessary.

Programmatic buying is not about eliminating human interaction from the buying process. It’s about automation and efficiency. An SSP such as SouthernX has technology that allows publishers to set price floors, which means that automated rules can be set to control the lowest prices being paid for inventory. Publishers have the option to drill deeper and prioritise and price inventory based on placement position, section, geography, buyer or audience segments. Buyers can contact their SSP for guidance on which sites to buy and at what price points.

The data technology should include granular access to transaction history which, if used to its full potential, could be used to aggregate data around bidding and yield strategies. In addition, a combination of automated and human auditing provides a brand safe environment for buyers. The automated quality control system looks for malware, unusual rotation patterns and policy violations, whilst the human auditing team scans and categorises creative for sensitive content and technical attributes. This auditing process not only ensures that the advertisers and publishers are legitimate, but it also protects data and intellectual property.

Using programmatic technology requires new skills and as these skill levels grow, we hope to see – as we have in developed markets – that publisher-digital sales teams use the efficiency of programmatic to sell the commodity of impressions and then enhance their premium sales offering by selling more creative digital solutions.

Programmatic should be seen as a powerful enhancement to digital and not a threat. Once brands, buyers and publishers begin to fully understand the power of this technology, and the wealth of meaningful data it can provide, there is likely to be a greater understanding, acceptance and sharper growth curve in the use of programmatic buying platforms.