Skip to content
The world of advertising has evolved over the years, and marketers now have powerful tools like programmatic media buying that can improve how they buy digital ad space. In this article, we’ll discuss everything you need to know about programmatic ads including key terminology, advertising platforms, and how to get started.
What Is Programmatic Advertising?
Programmatic advertising is an automated process that allows advertisers to buy digital ad space using special software. Unlike traditional ad-buying methods that had to be done manually, programmatic advertising uses algorithms to automatically buy ads across a wide number of platforms, including websites, mobile apps, and social media.
Programmatic advertising is also different in that it allows advertisers to target specific audiences using their demographics, behavior, and interests. This all happens within milliseconds, meaning ads are automatically shown to the desired user at the right time. This automation is part of what makes programmatic advertising so effective.
Key Terminology for Programmatic Ads
As you’re learning about programmatic ads, there are a few phrases you can expect to see and eventually use yourself. Here are some of the key terminologies that are common in programmatic advertising.
Demand-Side Platform (DSP)
A demand-side platform is a software platform that allows advertisers to buy ads automatically. It also allows them to manage multiple ad campaigns through a single interface.
Supply-Side Platform (SSP)
Supply-side platforms are platforms that allow publishers to sell their ad spots programmatically. SSPs connect publishers to multiple ad exchanges.
Ad Exchange
An ad exchange is a digital marketplace where advertisers and publishers can buy and sell ad space in real-time auctions.
Real-Time Bidding (RTB)
This refers to the way ads are bought and sold in real-time auctions, which usually happen in the time it takes for a web page to load.
Data Management Platform (DMP)
This is a platform that collects data from various sources to improve audience targeting.
First-Party Data
This is data collected directly from an advertiser’s own audience using things like website analytics or purchase history.
Third-Party Data
Third-party data is collected from outside sources and is then sold to advertisers to give them additional insights into user behavior and demographics.
Impression
An impression is a single instance of a digital ad being displayed to a user.
Click-Through Rate (CTR)
This is the ratio of users who click on an ad to the number of total users who view the ad, expressed as a percentage.
Conversion
A conversation occurs when a specific user action is accomplished. This might include making a purchase, filling out a form, or signing up for a newsletter.
Cost Per Click (CPC)
CPC is the cost an advertiser pays for each click on their ad.
Real-Time Bidding Explained for Digital Ads
One of the key concepts of programmatic advertising is real-time bidding (RTB). This is an automated process that allows digital ads to be bought and sold through instant auctions.
When a user visits a website, an ad impression is made available for auction on an ad exchange. During this split-second auction, advertisers can bid on the impression based on the value they place on reaching that particular user, which they determine using data such as the user’s demographics, behavior, and interests. As explained above, these bids are not placed manually, but rather automatically. The highest bid wins the auction, and the winning ad is instantly displayed to the user. This entire process happens in moments.
Real-time bidding is an important piece of programmatic advertising since it allows advertisers to target their audiences in a precise way, therefore reducing the money wasted on irrelevant impressions or clicks.
Audience Targeting in Programmatic Marketing
When you choose to use programmatic marketing, you’ll be able to target specific audiences based on things like their demographics, interests, behavior, and location. This is called audience targeting.
Audience targeting is important since it allows advertisers to serve their ads to the people who are most likely to find value in them. For example, an advertiser promoting a fitness product might target users who have shown interest in health and wellness websites, exercise apps, or fitness social media posts. Audience targeting not only improves the effectiveness of ad campaigns but also reduces wasted money spent on irrelevant ads by making sure that messages reach only interested audiences.
What Are the Biggest Programmatic Advertising Platforms?
Though there are many programmatic advertising platforms, there are a few that dominate the landscape. Here are some of the biggest.
Google Marketing Platform
This includes Google Display & Video 360, which is an integrated platform that includes management of display, video, TV, and audio. It also includes Ad Manager, which is Google’s ad management platform for large publishers who have high numbers of direct sales.
The Trade Desk
The Trade Desk is a DSP that allows advertisers to create digital advertising campaigns across various ad formats including display, video, audio, and connected TV.
Amazon Advertising
Amazon Advertising offers programmatic marketing through its Amazon DSP, allowing advertisers to reach audiences on and off Amazon. Amazon also offers first-party data that gives marketers insights for better targeting.
MediaMath
MediaMath is a DSP that offers programmatic buying capabilities for display, video, mobile, social, and advanced TV. MediaMath is known for its strong data integration and advanced optimization features.
Adobe Advertising Cloud
Adobe Advertising Cloud is a platform that offers advertising campaigns for display, video, TV, and search. It uses Adobe’s data for better targeting.
Verizon Media
Verizon Media is a DSP that integrates with Verizon’s media properties and third-party inventory, giving advertisers access to a wide range of audiences and ad formats.
AdRoll
AdRoll is mainly known for its retargeting. It offers programmatic advertising that includes display, social, and email ads. AdRoll typically focuses on driving growth for e-commerce and direct-to-consumer brands.
Learn More About Digital Ads with CTV Blueprint
Programmatic advertising gives advertisers the ability to target specific audiences in real time. At CVT Blueprint, we believe that programmatic advertising is one of the best ways to reach your desired audience. To learn more, contact us today.
