Programmatic Advertising: What It Means for Performance Measurement

By Sandy Drayton  | 

The phrase “programmatic advertising” is now ubiquitous in the ad tech industry. But despite all this attention, many in the industry still struggle to understand what programmatic advertising means or how it works. What exactly is programmatic advertising? And how is this revolutionary new technique transforming the way advertising is bought and measured? Let’s take a closer look.

Programmatic advertising refers to the technique of using software algorithms to buy media from publisher sites and ad platforms. There are two major forms of programmatic. One is real-time bidding (also called “RTB”), which lets advertisers bid in auctions for inventory based on specific goals like audience targeting, ad pricing and campaign length, awarding placements to the winning bidder. The other version, programmatic direct, allows advertisers to automate their buying of guaranteed ad impressions from specific publisher sites. For now, the majority of programmatic buying happens with digital media, though the technique is slowly finding its way into other ad formats like television. There are a number of benefits to this programmatic approach:

More Efficient
Because programmatic buys happen automatically, there is less manual coordination and paperwork necessary between buyers and publishers.

More Targeted
Advertisers can get much more precise and granular about reaching specific groups of consumers.

Potentially Cheaper
Related to the point above, as campaigns get more granular and precise, advertisers can spend less to achieve the same results.

Happens Faster
Rather than waiting days (or weeks) to buy and run a campaign, advertising can literally be bought and displayed in real-time.

Despite all the potential benefits of programmatic, advertisers also need to keep in mind the potential downsides of such campaigns. For one, programmatic buying creates more possibility of problems with ad context, with creative potentially appearing alongside objectionable or irrelevant publisher content. This can be a concern for any advertiser that is worried about how their brand is perceived by potential customers.

Perhaps more importantly, the automated nature of programmatic has important implications for campaign measurement. Because programmatic impressions are served automatically with sometimes minimal human oversight, the potential for advertising fraud and viewability issues goes up significantly. While an automatically-purchased ad might be more efficient in dollars and time saved, as well as audience reach, if the ad is only being displayed in less-visible or lower-quality placements, or to “fake” page viewers (like bots), these efficiency gains can easily be negated.

Whether your agency is already using programmatic buying, or simply considering taking the plunge, a savvy combination of human monitoring and systems that monitor for these types of fraud and viewability problems can help ensure you get the most out of your next programmatic campaign.

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