What is programmatic advertising and what differentiates it from other types of digital advertising?
The term “programmatic advertising” is the buying and selling of advertising spaces through determined technological solutions. A difference from other types of advertisements is that there is no intervention or personal negotiation with this tool. When we mention the term technological solutions, we are making a reference to the use of a software to process the data and carry out the buy/sell process of the said space in a very short time, practically seconds. In keeping with current trends, programmatic advertising also makes use of Artificial Intelligence to buy the advertising locations most appropriate for each advert in an automated manner, even complying to certain business rules to ensure more precise segmentation. One of the main differences between programmatic advertising and Google Ads; for example, is that the advertisers understandably look to be more selective and precise with their target audience, in this way the bids are made for the target markets, buying follows demographic and geographic data and not necessarily free spaces to insert advertising like a display case.
Programmatic advertising is managed through different platforms like:
- Demand Side Platform (DSP): it is the “module” that advertisers or agencies use to configure the business rules of the campaigns and target market. Here is where the bid for the advertising space is made.
- Sell Side Platform (SSP): is the “module” that buyers use to color their advertising space offering.
- Ad exchange: is the “module” responsible for the inventory, it is the “market” where the DSP buyers and SSP sellers are found.
Why must businesses have programmatic advertising in their digital marketing mix?
If the business looks for efficiency and a better return on investment, this is the best option. Nevertheless, not every business is ready to start programmatic advertising, since they ideally need to have target market data which allows these rules of segmentation to be established, in addition to more dynamic skills than those used by Google Ads and greater budgets that compensate for the advertising investment (the management platforms that manage this advertising have minimum investment whereas Google Ads do not).
We can say that as the business matures, it may start putting advertising in Google Ads/ Facebook and afterwards incorporate an advertising programme and continue adding other activities like AB test, for example, and integrate with their CRM as a way in which the user experience with the digital platforms can be more personalized each time.
Which tools can be used for this type of advertising programme?
The main tools are:
- Display & Video 360 Google, Campaign Manager
- MediaMath, DoubleClick (acquired by Google in 2008), Amobee, DataXu, Appnexus, Digilant, Audience Science, Cadreon, Sizmek and IgnitionOne.
Extendo pushes marketing teams to manage their clients’ value through the use of data and technology. We provide disruptive strategies that allow the creation of exchanges of relevant value using digital platforms is part of what we do; the way in which we look to meet this aim is, firstly doing a digital diagnostic to look for a deep understanding of the client’s digital ecosystem including not only the trends (such as the use of an advertising programme) but also to understand their audience’s characteristics, their product or service, their market, their existing digital assets, their maturity level and culture and their business objectives. Secondly we look to define an audience strategy and thirdly and finally, we recommend which of the channels are appropriate for digital advertising, As we mentioned previously not all businesses are ready for an advertising programme and not all need one.
Another alternative that the advertisers can consider, is to build their own platforms: a DMP or a CDP. Successful businesses know that the data from the interaction and identity of their clients (first party) are the keys to managing their present and future marketing initiatives. The good management of first party data, positioning of the business in the center of your digital ecosystem and reducing dependency on third party platforms.
The DMP (Data Management Platform) is a tool that has the capacity to capture the information on customer interaction from different silos with our digital assets. The principal objective is the consolidation of data and it makes sense at the same time to make it activated and extendable (usable).
The CDP (Customer Data Platform) is a technology which emerged with the need to have all the potential of first-party data (off/on) consolidated and to have a unique vision integrated from the client as much as the anonymous user like an active client that can be identified or authenticated before the system. The principal objective is that the flow of data is in real time, accessible and comprehensible for marketing professionals and with a large capacity to connect with other platforms.