How Does Programmatic Advertising Work?

In the world of digital advertising, a variety of technologies and solutions play a key role in achieving effectiveness and targeted impact on the audience. Each of the software solutions on the market plays a unique role in the programmatic ecosystem. So, you can concentrate on launching a white-label DSP, SSP, ad exchange, or in-app monetization solution. The idea is promising because all these solutions simplify the interaction between publishers and advertisers, and also significantly increase the effectiveness of digital advertising strategies.

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What Is Programmatic Advertising?

Programmatic advertising is a way of buying, selling, and placing ads using automated systems that make it possible to show messages to the most interested users. This method differs from conventional online advertising in that the advertiser buys space not directly from the site owner, but through a special platform that works according to certain algorithms.

Automatic purchasing makes the promotion process simple and fast. Most of the manipulations are performed by robots, so the buyer and site owner do not need to discuss prices or sign documents.

The placement format can be any: regular and dynamic banners, mobile advertising, video, and audio messages.

How Does Programmatic Ad Buying Work?

The process of buying and placing programmatic ads takes place in a real-time auction. It consists of several stages.

First, the publisher – the one who is going to place advertising – registers on a special platform where the auction will take place.
When a user visits a site with space available for an ad, the site notifies everyone who wants to show him their message.
An auction begins in which interested advertisers participate.
The company whose bid turns out to be the highest wins. It can then show its message to the visitor.

Bidding takes just a split second, and prices per impression are determined by participants in advance. In this process, the interests of the advertiser are represented by ad networks. These are special services that automatically select where it is most profitable to place an ad. Platforms that hold auctions and help publishers sell advertising space are called SSPs (Sell Side Platforms). Both sides meet on ad exchanges.

In addition to auction placement, there is another method called programmatic direct. Its essence lies in the fact that an advertiser, through a programmatic platform, buys placement from the owner of a specific site. The exchange and trading are excluded from this chain.

What Advertising Can Be Considered Programmatic?

In a broad sense, this term can be used to describe any advertising that operates using programmatic purchasing, for example, ads that are placed through Google advertising accounts. However, marketers usually use this term to refer to campaigns with very fine settings.

The placement auction is held separately for each visitor, so algorithms can target the audience based on a wide range of principles. Here is an example of some conditions that a user can set before posting:

location;
demographic data;
search queries;
interests (you can highlight users who often read content on certain topics);
browsers and devices;
behavior (for example, showing ads to those who are going to buy a motorcycle and are looking for information about motorcycle loans);
time of day.

In addition, with the help of automated platforms and their robots, users can show messages to their existing clients or set up remarketing for those who have visited the site before.

Robots receive data about the visitor using the digital trace that the visitor leaves while surfing the Internet. As soon as a person enters the website of an advertising platform, the system analyzes his cookies. Search queries, online purchases, social media accounts, and downloaded files help create a profile of the user and subsequently show him personalized advertising.

Benefits of Programmatic Advertising

Programmatic advertising, thanks to anti-fraud solutions, guarantees coverage of real users and excludes bots and fake accounts, which significantly increases the transparency and reliability of trading results. In addition, programmatic advertising provides several significant advantages:

Large-scale audience coverage. The higher the cost of display, the larger and better the audience.
Advertising profitability.
Real-time data and analysis. Advertisers can quickly respond to changes in the market situation and make informed decisions on advertising, including in real-time.
Use of own and third-party data. DSPs allow you to upload your own target audience data and combine it with external data, which improves targeting accuracy and the effectiveness of advertising campaigns.
Cross-platform strategy. Once interest peaks on one advertising platform, programmatic tools allow you to continue interacting with the client on other channels, which increases the impact and effectiveness of advertising.

Thus, programmatic advertising not only simplifies the process of managing advertising campaigns but also significantly increases their effectiveness, providing advertisers with a high degree of control and flexibility in achieving marketing goals.

For What Purposes Is It Effective to Use Programmatic Advertising?

Programmatic advertising allows advertisers to reach target audiences who are not looking for a specific brand and its offerings. Platforms allow marketers to cast a wide net to promote their products and services, unique value propositions, and content to the right people at the right time. Let’s look at the purposes for which the use of programmatic advertising is especially justified:

Increasing brand awareness
Introduction of new products and services
Promotion of premium content
Information about the event
Launch of retargeting

Automatic purchasing of advertising space is a convenient tool that saves time and makes the placement process more transparent, but without basic marketing knowledge, it will not be easy to master. For a campaign to produce results, users need to research the target audience, understand how targeted advertising works, and learn how to create ads that attract users’ attention.

Wrapping It Up

A variety of programmatic advertising solutions provide companies with powerful tools to achieve a competitive advantage in the market and effectively interact with their target audience. Proper use of DSP, SSP, and in-app monetization technologies is becoming a prerequisite for successfully adapting to rapidly changing market conditions and ensuring long-term success in the digital economy. If you are interested in using white-label DSP, SSP, or in app purchases monetization, take a look at Teqblaze, an experienced provider of white-label AdTech solutions.