November 14, 2018
Demystifying Programmatic Advertising Lingo
To many marketers, programmatic media can be confusing and complex. When you break down each aspect of programmatic media, however, it becomes clear when you should consider using this fast-changing medium and how to get the most out of it.
Programmatic by itself is not a channel – it is a method of buying advertising media more efficiently and effectively. It is also not solely online display media. You can now buy various types of media, including TV, audio, and out-of-home, programmatically.
There are multiple platforms through which advertisers can buy programmatic display advertising. The three most popular methods are direct from publisher (direct buys), ad networks (sometimes called programmatic media partners), and demand side platforms (DSPs).
Direct from publisher: This is when you negotiate a media buy directly with a publisher. This involves agreeing on the inventory, ad type, and rate, which is usually on a CPM (cost per thousand impressions) basis. Your ad will only show on particular pages from that specific publisher, and you will be billed for a certain amount of impressions.
Ad networks: Ad networks vary in exactly how they operate and what they look like. Generally speaking, ad networks purchase inventory and then re-sell that inventory to advertisers. In many cases, you will be charged a flat rate CPM, which is marked-up from the original publisher rate. You will then provide objectives such as geo targets and campaign goals, and the ad network attempts to meet those objectives within your cost constraints.
Demand side platforms: A DSP allows advertisers to buy media at cost directly through ad exchanges, where ad inventory is managed in an auction-based format or through real-time bidding. DSPs are simply technology platforms that have access to media inventory. You will typically pay fees to access the technology and from there, buy media based on your needs. This is similar to buying ad inventory in Google Ads or Facebook Ads, where you identify your campaign objectives and how much you are willing to pay or bid.
Out of the three methods identified, using DSPs is the most transparent model for advertisers. This is because DSPs give you full information on media costs and fees, where your ads were shown, and which exact audiences your ads were shown to. As an advertiser, you want to know on what websites your ads are running, whether your ads are being used for prospecting or retargeting, and that your objectives are being met. Ad networks and publisher buys, on the other hand, generally do not provide this detail to you.
There are three common scenarios where advertisers should start to consider programmatic display media or even more specifically, DSPs.
Most direct response advertisers rely heavily on Google and Facebook to drive revenue and meet their marketing goals. While Facebook and Google are very effective at capturing demand, there is a limit to how much demand exists at any one given time, and high growth marketers typically have challenges at some point with continued growth. If you feel that you have started to reach a point of diminishing returns, programmatic display media and DSPs are a good option to reach net new prospects and drive more demand.
At some point, most search marketers test the display waters by running campaigns on the Google Display Network (GDN). Google has done a good job of integrating display into Google Ads, allowing you to buy display in a user-friendly way. However, the GDN does not provide the full capabilities of a DSP.
If you feel you have a basic understanding of programmatic display and are ready to increase investment levels significantly, a DSP would be a good choice. DSPs have significant advantages compared to the GDN. This includes more reach and access to multiple exchanges, better targeting capabilities through first party data on-boarding and third party data integrations, more advanced reporting, advanced brand safety, fraud and viewability capabilities, more access to premium inventory, and robust API integrations.
In another case, you might have been investing in traditional display media buying for years, whether through direct buys or through ad networks and partners. You understand the value of display advertising, but it can be difficult to justify the spend and apply proper measurement due to disparate partners, media buys, and audiences. In this case, DSPs are a good option to consolidate your display media buys in one platform, allowing for more consistency and a single point of truth.
When it comes to choosing a DSP, we always suggest starting with your business objective. Ask yourself, what are you trying to achieve? From here, you can start to map the appropriate tactic. Whether you are trying to reach net new prospects, drive existing users further down the funnel, or capture more sales, your objective will determine the appropriate partner based on their capabilities. You’ll also need to research what is unique or proprietary about each particular platform. In some cases, one DSP may be able to achieve all your objectives; in other cases, you may need to consider multiple partners.
When evaluating and determining whether one or many platforms are needed, consider proprietary data and audience access. For example, the Google DoubleClick Bid Manager DSP has free access to proprietary Google audiences and is the only DSP that can run on YouTube. On the other hand, the Amazon DSP is the only DSP that can access proprietary Amazon audiences. The key with choosing DSPs is to avoid audience overlap and bidding on the same audiences across multiple platforms – in other words, avoid competing against yourself.
Before jumping into programmatic display advertising, make sure to understand your objectives, what you are trying to achieve, and whether or not programmatic display can aid in that. If you’re looking for a partner to help you launch programmatic display efforts, contact our team.