Our Guide to Programmatic Media Buying

If you haven’t heard of Programmatic Media Buying, then you should have. Programmatic is revolutionising demographic targeting in digital advertising and will, according to an eMarketer study, account for 70% of digital ad spending in 2017 – up 44 per cent in two years.

If you’re either unsure of the reasoning behind such increasing hype, or one of the few who have yet to delve into this promotional game changer, then fear not.

I’ve compiled a nifty guide that should leave you wondering why you ever doubted Programmatic in the first place.

What is Programmatic Media Buying?

A while back, the buying and selling of advertising space would have been carried out directly between advertisers and publishers. Programmatic media buying allows those transactions to be carried out automatically. 

In its simplest form, programmatic means automatic.

Automating this process has helped to eliminate the issues derived from manual ad insertions, develop targeting methods and speed up the entire exchange.

This automated system allows for advertising space to be both auctioned and sold in second, effectively being completed in the time it takes for a potential customer to load a webpage.

Seeing as these ads are often the first time a customer is being exposed to a brand, it’s essential that the campaigns are as relevant, creative and eye-catching as possible.

What are the Options Available for Programmatic Buying?

Distinguishing the differences between the programmatic options available can be difficult if you’re even a little bit unsure since they often cross over, and each area carries a degree of complexity that can be difficult to decode.

Real Time Bidding (RTB)

To keep it simple, Real Time Bidding or RTB is pretty similar to programmatic but with fewer layers of advanced behavioural targeting. DoubleClick explains;

“Real time bidding (RTB) is a server to server integration option for network buyers that allows networks to evaluate and bid on each available impression.”

In short, RTB allows an advertiser to purchase on an impression basis through a multitude of ad exchanges, bid on said ad space, and finally display their desired advertisement all before the site finishes its loading process (I know right?!).

Programmatic Direct/Guaranteed

This process basically eliminates the auction part of the process and instead allows the advertiser to purchase a set amount of impressions.

Differing slightly from the traditional programmatic process, the direct option eliminates the winning/losing element and replaces it with a set frequency and quantity of ad space.

Private Marketplace

In this instance, ad exchanges are eliminated entirely. Instead, publishers select buyers to bid on their ad space directly.

How Does Programmatic Differ from Display Advertising?

For those of you who are comfortable with Display Ads, you may be wondering what the difference is between your tried and tested method and the new kid on the digital block

Well in that respect, let’s break down what programmatic gives marketers.

1. Enhanced Device Targeting

While Google offers a range of audience targeting options that are based on its own and some inferred data, such as device and demographic targeting, programmatic gives marketers extra layers of third party data to target.

Google gathers its own data from its users’ account information and infers data by monitoring user behaviour. However, programmatic platforms empower advertisers to build a more holistic persona based on a wider range of parameters, target a larger cookie pool and potentially target a wider range of users according to individual browser habits.

By using programmatic advertising platforms, and utilising the plethora of cookie targeting options, advertisers are almost guaranteed to reach more people within their target market at the right time, rather than relying on Google’s mix of first-party account and self-appraised data.

2. Greater Inventory Size

The inventory refers to the ad units that are sold. If you’re using Google right now, then chances are you’re using the Google Display Network (GDN), Google’s ad network which displays advertisements on over two million websites across the web.

Side note: This shouldn’t be confused with DoubleClick Bid Manager (DBM) which is Google’s DSP (Demand-side Platform).

As we mentioned above, programmatic has access to a lot more ad exchanges (software and platforms in which publishers and advertisers can buy/sell ad space) which in turn allows advertisers to have a far greater reach than if the same process is run via the Google Display Network.

While that’s not to say that the programmatic approach is necessarily better. However, if you think your business would benefit from the ability to reach a wider audience and have more access to a multiple of ad exchanges, then yes, it’s better.

3. Advanced Behavioural Targeting

The aforementioned RTB (Real Time Bidding) allows advertisers to set specific parameters such as network reach and maximum bid. While this has proved effective, programmatic builds upon this and allows the advertiser to further layer their targeting by including users’ online behaviour as an advertising tool.

Behavioural targeting studies an internet user’s online presence and constructs a profile based on their activity. This profile is then examined in order to determine whether or not a specific ad should be shown to that specific user, thus increasing the effectiveness of the overall campaign.

While the GDN does prove a certain degree of behavioural targeting, the tools are nowhere near as in depth as those offered by the programmatic software options.

The Ecosystem of Programmatic 

If you’re now comfortable with the different aspects of programmatic, but not quite so sure as to where exactly you fit into the process itself, then worry not as I’ve got you covered there too.

The Advertiser/Marketer

Utilising programmatic allows the advertiser to share their ads with large scale yet highly targeted audiences. In turn this allows for a more effective overall advertising campaign.

The Publisher

Basically, this is a platform on which the advertisement is displayed. From websites to apps, social media platforms to mobile games, the list goes on.

Ad Exchange

The marketplace which hosts the so called ‘ad auctions’. This is the platform publishers can sell, and where advertisers can bid on prospective ad placements.

Ad Network

Advertisers who are looking for an inventory bulk can be found here. While the Ad Network can allow for more guaranteed placements, this option has decreased in popularity somewhat due to the Ad Exchange offering more in terms of targeting options.

Agency Trading Desks (ATDs)

These are the agencies that assist and implement programmatic in its most efficient form. They typically help develop an effective and immediate strategy in order to capitalize on the highly targeted software.

Demand Side Platforms

DSPs are the platforms which host the aforementioned advertising space. A few popular ones include DoubleClick, AppNexus and StackAdapt.

Supply Side Platforms

The flipside to DSPs, this is space in which advertisers come to sell their ad space.

Programmatic Issues

With great advertising comes great responsibility, and poor advertisements could inevitably damage the integrity of the brand. While technology has come a long way, Google came under fire for having disreputable websites appear on both their GDN and DBM platforms.

This naturally led to respected brands’ adverts being displayed on sites that were not in line with company values, and risked their overall image. While steps have been taken to minimalise the risk of repeating these mistakes in future, brands must understand and avoid placing advertisements on low quality sites.

Whilst most businesses understand this, those who are looking to boost impressions for a lower cost often leave themselves open to this type of manipulation, and it can leave them vulnerable in the long run.

Programmatic Fraud

Based around transparency and visibility, programmatic fraud is unfortunately something that companies should keep a cautionary eye on.

Effectively, programmatic fraud occurs when software has been utilised for the purpose of serving adverts to unintended audiences, all while the service has still been monetised.

Programmatic fraud has since been categorised as either ‘Non-Human Traffic’ or ‘Human Traffic’ and are utilised as follows:

Non-Human Traffic

As it says on the tin, a bot or a script generates false page views, clicks and, on extreme occasion, fake form submissions which can count as a conversion.

Scripts: A static IP and cookie ID usually gives the game away. A simple ad blocker can prevent its affectability.

Bots: Jargon for a complex form of online fraud. In the most intelligent examples, bots have been known to utilise rotating user agents or random proxies which in turn leads to an unfixed IP address, making life harder for those attempting to track and/or block their usage.

Human Traffic

Once again, the clue is in the title as the end user is a living, breathing human being. Human Traffic has proven to be difficult to counteract as statistics have proven themselves to be increasingly unreliable. Alongside this, Human Traffic Fraud operates in a number of ways which are broken down as follows:

Ad Injection: This is where ads are placed on a site without the permission, or payment of the domains owner. The most widely recognised form of ad injection involves intercepting the intended ad and hijacking their pre-paid space. While less popular, black hat advertisers have also been known to simply place an ad on a site that has no media space, effectively forcing the campaign upon them.

Domain Spoofing: Dubbed the most difficult form of fraud to detect or prevent, fraudsters will often implement a code that changes a domain’s basic URL. In doing so, an advertiser can be tricked into believing that they’re displaying an ad on premium quality websites, when in fact the domain belongs to a low quality, fraudulent site instead.

Ad-Stuffing: When end users are unable to see the ad as it’s effectively been hidden from view. This is done by either double-layering an ad apace or by resizing the ad so that it only measures to 1 pixel  in size.

While many platforms have attempted to implement strategies that combat these types of fraud, statistics gathered by the Association of National Advertisers (ANA) in 2015 suggest that it’s still costing advertisers over $6.3bn.

Much of the responsibility for eradicating fraudulent activity remains upon the shoulders of the publishers, with warning being issued to double check domains, consistently communicate with third party advertisers and above all, trust that gut instinct. In the words of almost everyone’s mother, if it looks too good to be true then it usually is.

Programmatic in 2017 and beyond 

Going back to our introduction, 2017 has been forecasted as a game changing year for programmatic media, but what else can we expect to see in the near future?

Here are a few of my predictions.

Spend will reach new heights

As more and more advertisers utilise the effectiveness of programmatic, and implement it as part of their standard marketing strategy, the spend that is being used in these platforms is predicted to see a dramatic increase too.

Only last year, eMarketer predicted that UK programmatic spend will reach £2.46bn, a huge increase from the £1.8bn utilised in 2015. In this regard, it’s safe to assume that this rapid growth will continue into 2017 and beyond.

Machine learning will reach a whole new level

Algorithms are in a constant state of adapting and educating themselves on web users’ behavioural patterns, and such adaptations are paramount to the increasing success of programmatic prospecting.

With this in mind, such algorithms are expected to increase in resourcefulness and become an increasingly powerful tool to advertisers.

Cross-device will become more effective

In the last decade, the amount of time spent on mobile devices has grown rapidly, with desktop appliances swiftly becoming less popular.

It’s due to this change in preferred device that advertisers have begun increasingly curating ads that are both visible and user friendly across both large and small screens as well as advancing cross-device identity to improve both targeting for the advertiser and the experience for the target audience.

Header bidding will only get bigger

Header bidding, otherwise known as device bidding or pre-bidding is a method in which publishers offer inventory to a multitude of ad exchanges before exchanging with the ad servers.

This is in place to maximise profit from having multiple bid sources, however it has been hindered slightly by accessibility and usability. Although in saying this, steps have been taken to improve the system and it’s widely predicted that its popularity will sky rocket in the coming year.

Conclusion

So there we have it. What was once a terrifyingly troublesome topic has now been broken down into easily digestible chunks.

No matter where you fit within the process, whether you’re an agency, a company looking to upgrade your marketing strategy or even just trying to understand a little bit more about an exciting new advertisement development, we hope this guide has aided you on your journey.

Could Liberty help you with programmatic? Abso-ruddy-lutely. Take a look at what we do – it’d be great to talk all things programmatic in more detail.