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This is a bit of a refresher of an article I wrote around two years ago on real-time bidding (RTB). Admittedly that was centred around RTB and video ads; but RTB is a very large part of programmatic buying.
So what on earth is programmatic buying?
Programmatic buying is super useful for advertisers as it essentially automates all of the processes that used to nauseate them. With RTB, buyers can set parameters like bid price and network reach. A programmatic buy will layer these parameters with behavioural or audience data all within the same platform.
At its core, this means that marketing professionals can define the ranges of: budget; goals; and attribution model and allow the platform to rapidly adjust dozens of variables in real time based on performance to determine the right campaign settings to achieve the desired ROI.
Essentially this boils down to advertisers being allowed more time to be creative and less time reading through spreadsheets of ad data.
Is programmatic buying the future?
Well according to a study conducted by eMarketer in late 2014; it certainly is the future with programmatic ad spend expected to reach US$20-billion by 2016! In 2015, that number is half that (US$10-billion) and only 20% of all the online ad sales.
Programmatic buying can actually save money. Through automation, the transactions become more and more efficient, cutting out the complex ad-operation tasks that usually bloat the margins. At the same time though, programmatic buying CAN involve a myriad of various technology vendors all of whom enable certain types of targeting or verification, and yes, they all collect tolls along the way bloating the ad costs once more.
In an ideal world, automated technologies would take over data-heavy tasks and leave humans to what they do best – be on a beach drinking mao-tais.
You might have guessed it
The almighty Google has its own Programmatic Buying Guide, which is incredibly useful for anyone wanting to understand programmatic buying and to experiment with it themselves.
Programmatic Buying vs Big Media Placement Agency
The thing that you need to weigh up is how effective are big agencies being at being able to deliver what programmatic buying is all about which is:
- Connect 1:1 with audiences, at scale
- Engage across screens, and with formats
- Access top-quality inventory
- Measure What matters
These are the things that marketers from large and from small organisations alike are trying to unlock. And while I do not for a second believe that programmatic buying will be the majority of online ad spend; I definitely think that companies and agencies alike need to understand how to place it in their marketing mix to take full advantage of it.