Everything you need to know about Programmatic Advertising

All about programmatic advertising

While surfing online, we come across so many different kinds of display ads. But how does the marketer display the right ad to its target customer? Well, to know that, you need to know all about Programmatic Advertising.

What Is Programmatic Advertising?

There are millions of websites and if you want to advertise your brand online then you have to choose the right online platform. Watching a home appliances ad on a dating website would be weird, right?

So that’s when programmatic advertising comes into play and be the savior of both the marketer and the ad publisher. It helps the marketer to show on the right online platform where it might get conversions and the ad publisher gets the right ads to display on its online portal.

All About Programmatic Advertising - Definition
Definition in simple words

The Display Trading Council simply defines programmatic advertising as the use of automation in buying and selling media.

Now let us see where does the programmatic advertising takes place.

Programmatic Advertising Platforms

A programmatic advertising platform is where advertisers and marketers can automate the steps to create an online ad campaign. It is a part of the whole system of programmatic advertising and is responsible for its steps in the advertising process.

You must’ve heard of stock exchanges where stocks are bought and sold. Similarly, an ad exchange is a place where online display ads are bought and sold via programmatic ad platforms. 

There are two parties involved in it-

  • One is the advertiser who is on the demand side looking for ad placement.
  • Second is the publisher, who is on the supply side who wants to put their ad inventory on the ad exchange.

Following are the two types of Programmatic ad platforms.

Demand-Side Platform (DSP)

Demand-side platforms assist the advertisers to automatically purchase the ideal ad placement. The DSP is connected with an ad exchange. The advertisers can register with the DSP and get their ideal ad placement. The DSPs send an auction signal to ad exchange whenever a visitors enter a website, and then the DSP displays the ads that might be relevant for the visitor if it wins the auction.

Supply-Side Platforms 

The supply-side platforms assist the publishers who are want to connect their ad inventories to ad exchanges. The publishers register with SSP, and then they connect with the ad exchange. The SSP signals everyone on the ad exchange that what ad content is available for purchase. The ad inventory gets auctioned to the highest bidder (advertiser). 

That’s how the supplier, i.e., the publisher sells its ad placement to the advertiser via SSP.

How does it work?

Let us understand the working of Programmatic advertising platform with the following example.

An Advertiser wants to sell more of its cosmetic brand. Now the advertiser will hire a programmatic advertising platform to identify online consumers.

  • Demographies- 20-45age group Females
  • Geography- Mostly Urban or semi-urban areas
  • Behavior- consume content like makeup tutorials, skincare videos, personal care.
  • Devices- Smartphones

Now, the platform analyzes and uses real-time data to find the most appropriate online platform for the campaign and buy the digital ad inventory throughout any ad media buying practice.
Moreover, the ads will display based on customers’ behaviors and likings.
Now the advertiser can specifically target its potential customer with its cosmetic brand ad. Thanks to programmatic advertising.

Types of Programmatic Advertising

Real-Time Bidding

Real-time bidding is the most popular type of programmatic media buying because of its extensive usage. Its other names are open marketplace or the open auction.

As the name suggests in RTB, the ad slots are open to all advertisers and sold at an open auction type of bidding. The advertiser who raises the highest bid gets the ad spot. The buying process takes place in real-time, and the advertisers can select ad slots that are made available.

Private Marketplace

The private marketplace in almost the same manner as real-time bidding, but the only difference is it’s not open for all the advertisers. Moreover, the private marketplace is available for some specific advertisers on an invite-only basis.

In a private auction, the publishers usually create a premium ad inventory and reserve it for preferred advertisers.

Preferred deals

In preferred deals, advertisers can choose the ad inventory at some fixed price. The ad inventory is made available to advertisers even before it goes on in the private marketplace or open auctions. It is a refined approach because both the parties, i.e., advertiser and publisher, agree on the price and other related terms.

Moreover, the advertiser gets a preview of the ad inventory, and without any conditions, he can choose to make any purchase. Also, the advertisers can use the demand-side platform (DSP) to determine their target audience and whether to purchase the ad spot or not.

Programmatic Guaranteed

The programmatic guaranteed is the type of media buying that is similar to the traditional approach of media buying. In this, the advertiser and publisher negotiate the media buying terms on a one-on-one basis.

The programmatic guaranteed does not follow a bidding system as the other media buying have come across. Moreover, here the publisher sells the inventory directly to the advertiser after negotiation. The advertiser can choose ad inventories, audience targetting, and prices.

Why do you need Programmatic Advertising?

So many marketers might have a question that why they need to do programmatic advertising. Well, check out the following compelling reasons why you need it.

  • You can access a greater pool of publishers to get your brand ad published.
  • You can streamline your ad buying process and that too without appointing any middlemen.
  • As the process is automated, there are less or almost nil chances of human error.
  • Show relevant ads by targetting customers on demographic factors.
  • Measure your campaign ROI in a better way and justify every penny you spend on it.

The secret to the success

Now many of you would wonder that what makes programmatic advertising successful. The machine learning algorithm analyzes the ad campaign and the viewer behavior to make real-time campaign optimizations so that targeted audiences convert into customers. Different kinds of data increase the probability of the ad campaign’s success.

The precise and detailed segmentation so that the ad reaches the potential buyers makes programmatic ads successful.

Who can utilize Programmatic Advertising?

The answer to who can utilize the programmatic advertising would be any brand that wants to go out in the online platform and want to be seen by their targets.

One issue with online advertising is that it takes too long to reach out to the target audience. Also and if your ad does not reach your potential customer, then your online marketing efforts are failing.

So any brand can utilize programmatic advertising to get in the eyes of marketers and boost their conversion rate online.

Let us look at some of the companies that boosted their conversions with Programmatic Advertising.


AirAsia is the aware winning low-cost airline. The airline wanted to reach its audience and increase its conversion. So it used Facebook as its marketing channel and used video ads to display its ads on customer profiles on Facebook. It retargeted the website visitors on Facebook. Also, the airlines displayed frequent flyers showcasing its reasonable rates.

And the result of its programmatic ads was that 20%of viewers saw the full video ads, and hence it is an award-winning airline stated initially.

Missing People

‘Missing people’ is a Nonprofit organization in the USA. The NGO used programmatic advertising for a social campaign. It was to run its Child Rescue Alert Campaign. But the NGO had a short budget for marketing.
But programmatic ads helped the NGO. With its location-based ads that automatically appear in the Facebook news feed when any child goes missing in that area. It is a more targeted and location-based search that runs for a week on people’s Facebook feed. The results were great as 20% of children that they pleaded for were found alive. That’s how beneficial programmatic ads can be.

Benefits of Programmatic Advertising

Wider Reach

According to statistics, there are over 3.5 billion internet users in the world. That makes the internet a place to reach out to millions of people with your ads. With programmatic ads, you can reach your potential customers as it narrows down your specific audience.

Better targeting

Increase targetting capabilities is the most prominent reason that one chooses programmatic marketing. Advertisers can show their ads to ideal customers. This increases the chance of conversions. It also offers flexibility in ad campaigns to retarget the ad campaigns and make changes.

Get real-time measurement

One major drawback of traditional marketing is that the marketers cannot measure its advertising impact on the audience in realtime.

Programmatic marketing fulfills the dream of every marketer to get real-time analysis of their marketing campaigns. It measures the targeting performance, ad creativity, and how well it is performing overall as soon as the ad gets launched.

Better Transparency

The major benefit that the advertisers get is transparency in their ad campaigns. They get all the information that they need. The advertisers know what ad inventory they are buying, the target audience, how the ad is performing, and what they are spending on the ad campaign. They can get all such information and get the result in real-time as well.

Conclusion: Now you know all about Programmatic Advertising

So here we wrap up all programmatic advertising. Now you understand all about programmatic advertising and all its benefits. You can set up your ad campaign and watch how it can benefit your brand.
Internet is a wide platform to advertise your brand. So the bottom line is, create a programmatic ad target your potential customers and convert them into your customers

There are billions of people out there in the online field, and you need to find who your customer and make them see what you have to offer them.

Tejaswani Sharma
My educational background is in Management and business administration. I've always had a keen interest in marketing, which has brought me here to present the knowledge that I've gained on this subject and matters related to it. I am very observant of things, and I think that the best way to learn is through observation. I love being creative with my ideas and every work that I do. I'm always happy to help others in whichever way possible. I believe that a positive mind leads to a happy life. My mantra in life is to go with the flow and accept whatever comes my way. I love listening to music in my free time. My interests include watching movies and series that involve reality, lifestyle, docudrama, and Art.