There are a lot of misconceptions and untruths around this still fairly new form of digital advertising. It’s here to stay so we better understand it, right? 

Let me highlight some of the issues/questions INMA members have asked about:

Is programmatic advertising actually any different from traditional display advertising?

The main difference between traditional display advertising and programmatic is inventory. If an advertiser, for example, buys ads on the Google Display Network (GDN), they can only earn placements on the Google Display Network. Makes sense?

However, in that scenario, “only” is a bit of a red herring, as the GDN includes over 3 million Web sites. The point is there’s a limit. 

The other big difference is the pricing model. Advertisers buying into display networks like GDN can be billed when ads are viewed, clicked, or even when users convert, depending on preference. Advertisers buying into programmatic networks are charged based on the number of consumers who see the ad.

What kinds of things can programmatic do for media companies and our advertisers?

• Traditional placement: Programmatic is used by some advertiser brands to add to their existing display placements. As programmatic is network agnostic, advertisers who want more impressions (or better, more intelligent ones) often divert to programmatic to help grow audience. This inventory isn’t always on the best quality sites (or indeed in the most viewable of locations), but because of this, they’re often really cheap, sometimes costing fractions of a penny. Taken as an add-on tactic to existing advertising, we can use programmatic to earn more traditional display placements.
• Real-time bidding (RTB): RTB is what many think of when they think about programmatic. Rightly too, as it’s what much of programmatic actually is. Most programmatic placements are bought/sold in real time (i.e., in the time it takes a Web site or app to load) via the ad exchange, which in turn allows brands to earn the most appropriate placements in front of the best possible audiences.
• Hyperlocal: If it’s done well (intelligently), all digital advertising is geographically targeted. But targeting a country or a maybe a region or state isn’t always the best way to get in front of the most ideal audience. Hyperlocal, geo-fenced, or geo-targeted ads allow advertisers to bid on inventory being served to consumers within a small geographic area. It’s a good way to serve a customised message to consumers maybe attending an event or boarding a flight and many other scenarios.
• Digital out-of-home (OOH): More and more, OOH ads are turning digital, from TV to billboards to taxi screens. Like much other inventory, this ad space is very often sold programmatically, meaning there are lots of opportunities for brands to reach specific audiences even when they aren’t looking at their phones or computers.
• Connected TV (CTV)/over-the-top (OTT): The growth of over-the-top (OTT) viewing platforms like AppleTV twinned with the ubiquity of digital streaming services like Netflix has created a brand new world of opportunities for advertisers. Cable services generally have embraced smart advertising, opening even more advertising placements for users watching “standard” TV programming. Premiums on CTV campaigns often start at much higher rates, meaning programmatic may offer opportunities to access cable inventory at a more reasonable cost.

What are common concerns about programmatic from media companies?

• Viewability: Because programmatic is sometimes used to sell inventory that exists at the bottom of Web pages or indeed buried deep within apps, there have been concerns about how many programmatic placements are viewable by audiences. Over recent years, many more checks — particularly a billing model around viewable impressions — have been put in place by programmatic platforms to ensure higher levels of ad viewability. As a result, viewability rates are increasing globally.
• Ad fraud: Up to now, spam and bot-clicks have made ad fraud a real concern for digital advertisers. And while some platforms, e.g. Google, have teams set up to review fraudulent clicks (and refunding advertisers where appropriate), programmatic platforms have been somewhat slower to recognise the requirement for fraud analysis and, ultimately, prevention. This doesn’t mean there aren’t measurers in place to try to prevent fraud, but because programmatic is so common now, the issue around fraud will possibly always be a worry. Just as it’s always been a worry for any digital ad network.
• Brand security: Programmatic has chiefly been a “managed” service, yet self-service programmatic is becoming more and more ubiquitous (self-service being part of what seems to be a global shift to ad automation in media houses, where appropriate; see module 1 of the forthcoming INMA advertising master class). One of the drawbacks to any managed service and to programmatic is the inability to control placements that could be blacklisted through other tools, e.g. Facebook or Google. This means advertiser brands could be buying ad space on Web sites where audiences are contradictory with the types of products/services they provide or whose content is generally questionable to start with.

What are the advantages of programmatic?

• Guaranteed volumes: Viewability and the quality of some impressions may sometimes be in question, but a huge benefit to programmatic campaigns is knowing how many impressions a campaign will be generating before the campaign launches, which of course, is never a guarantee with standard display, search, or paid social campaigns. This helps to control client cost commitments and to plan other components of the advertising budget with the comfort of knowing that at least one channel won’t require incremental budget to meet its goals.
• Better audience insights: Because programmatic campaigns require data management platforms to run, every impression means audience data is reviewed, evaluated, and optimised against. This information is available to the advertiser so they may get a better understanding of the audience, including what types of messages and creatives the audience is more likely to react to.
• Reporting in real time: Of course, with much bidding happening in real time, results are also available in real time for both advertisers and publishers. Typically, data in Google Ads, Facebook Ads, and other platforms is delayed by at least a few hours, but programmatic data can be reviewed within seconds of a placement being earned. While this is a positive, it can also be a negative in that strategic reports should, of course, be compiled from data gained over a period of time, not just maybe an hour or day. However, having real-time insights into whether a certain placement, or creative, or message is, or isn’t performing well can be useful to advertisers.

I hope the above gives you an insight into what programmatic can do for your advertisers or at least gives you some useful knowledge to be able to have an intelligent conversation around this type of advertising with our agencies and advertisers. 

It’s not a dark art, and it’s not going away. We need to embrace it, not be afraid of it, and experiment with it.

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