As a potential component of government communications — including specific projects and initiatives — programmatic is now a real and live option for targeted campaigns on finite budget. That said, it’s a concept that can easily confuse people unfamiliar with its application and the constantly changing language of online marketing.
Indeed, comedian Jimmy Kimmel quipped in 2014, “Programmatic buying is the gluten of advertising”. Like gluten, programmatic has become a buzzword many people often use but don’t fully understand.
What is this machine?
Programmatic, at its most basic level, simply means automated. A lot of people confuse it with buying ads through computer-run auctions (known as real-time bidding, or RTB), but that’s just one of many ways ads can be bought programmatically. At its core, programmatic buying is any ad buy that gets processed through machines. This confusion is often exacerbated by the complexity of the whole ecosystem, as evidenced by the diagram below.
As you can see, there are numerous parties involved, and a plethora of different ways ad space can be bought, from Automated Direct to Private Marketplace, from Open Exchange to Direct Publisher and Affiliate Network buys.
Know your product
Before we continue, it’s worth running through the main programmatic buy types and their benefits:
- Automated Direct: As close as you can get to an old style Insertion Order buy, delivered programmatically. Good for buying competitive placements with branding campaigns when it’s vital a campaign runs on a certain website.
- Private Marketplace (PMP): An agreement is made with the publisher based on price, audience, format, advertiser and access level. The buyer is then given a unique identifier called a deal ID to run the campaign programmatically. Publishers only sell their best inventory via a PMP, which allows programmatic buyers to access high-value placements.
- Open Exchange / Marketplace (OMP): The broadest inventory base available. Big brands such as Google, Yahoo and Mi9 all have their own exchanges. The OMP is used primarily for Direct Response campaigns; due to the large scale, this is where we can cherry-pick users for retargeting campaigns and find the right audience by running prospecting activity.
- Affiliate / Network: Ad Networks and Affiliates offer monetisation of unsold impressions by bulk-buying remnant inventory and selling packages to agencies and advertisers on a static tag-based buy.
Shopping for value
The key element of all things programmatic is remnant inventory – ad units that have not been purchased by an advertiser, and must be accounted for using another strategy such as the ones mentioned above.
Where government agencies can benefit from programmatic is the efficiencies of buying remnant inventory on top-quality, high-trafficking, brand-safe websites at scale, cheaper than a direct publisher buy.
Ideally, a site will sell every one of its available ad impressions directly to advertisers at premium CPMs (which means cost per thousand). However, with the plethora of content consumed online now, this is rarely the case, even for the most premium publishers imaginable – meaning programmatic advertising has become a behemoth in its own right. Through automation, the transactions become more efficient, cutting out complex ad-operation tasks and the time-consuming process of dealing with multiple publishers directly.
One thing to factor in, however, is programmatic can involve myriad tech vendors that enable certain types of targeting or verification, which all have their own fees adding to the total bill. Ensure all costs are outlined up front before starting a campaign.
In an ideal world, automated technologies would take over the heavy-lifting tasks such as ad-serving, trafficking and the auction process and leave advertising professionals to do what they do best – make informed decisions on where to invest based on the overarching goals of the organisation they represent.
Andrew Berry is Paid Media Director at Switched on Media
