The ultimate aim of advertising is to reach the right consumer at the right time, and ads are, therefore, targeted and segmented on this basis.This philosophy is incorporated in buying an inventory of ads.. This is facilitated by studying behavioural patterns of the consumers and using analytical tools. Thus there is no mad chase of the consumer by being present on all media. It is about being present with an offer exactly when the consumer is in need of it.

This is called programmatic advertising. It targets specific users at the right time with the right message. It leverages some of the information about their past online behaviour such as search pages visited and transactions done. It constantly follows the user. It is virtual stalking.

At times, this may lead to the appearance of the same ad on the sites he visits for a couple of days. It could be annoying. Of course, this raises the issue of the privacy of the consumer. Care is taken to make the data anonymous. Personally identifiable information (PII) is never shared.

In digital advertising, the publishers still sell about 80 percent of their digital inventory through manual deals. It allows them to command better ad rates. Only 20 per cent inventory is sold through programmatic

Inventory sold through manual deals is sold on the basis of cost per impression ( CPM ) . Established publishers get Rs.200-250 cost per impression. Newbies and second rung apps and sites get Rs 70-150 cost per impression. Cost of running ads during a video ranges from Rs 3-4 per view in case of popular sites.

A month’s fixed presence on websites/ m-sites/apps command Rs.5-6 lac. A roadblock dedicated to one advertiser costs Rs. 6-7 lac per day. This shows why the publishers prefer manual deals, rather than programmatic.

Let us see the break-up of digital advertising. It is a market worth Rs. 4800 crore. Of this, 35 per cent is accounted for by Search Engine Optimisation ( SEO ) and Search Engine Marketing ( SEM ). Display and Social media account for 42 per cent. Rest includes e-mail marketing, mobile advertising among others. Programmatic advertising is 10-15 per cent of display advertising. It currently stands at about Rs.300 crore.

Programmatic Buying Formats

There are basically three formats

• programmatic direct
• real time bidding ( RTB )
• programmatic PMP

Programmatic Direct: A buyer and a seller negotiate a fixed price. Thereafter, the inventory is traded on programmatic platforms. In this method, there is no auction.

RTB: Advertisers bid for inventories in an exchange environment and win impressions. In real time bidding, each impression is auctioned off. Each impression is priced individually.

Programmatic PMP: Within the real time bidding, there exists the private market places ( PMP ) option. Here the publisher opens the inventory to only a select group of buyers

In India, PMP and programmatic direct work better.

There are a number of agencies who provide programmatic services — Group M’s Xaxis, Komli Media, Appenexus, Chocolate. Some of these are pure demand side platforms ( DSPs ). Others are trading desks ( or ad exchanges ). Each has their own programmatic tools. Facebook has its own platform called Facebook Exchange ( FBX ) which allows real time bidding. Google has two different kind of platforms — one for advertisers, and the other for publishers. Digital agencies so far relied on third party tools but now aim at creating their own tools.

Which advertisers use programmatic? Many online e-commerce companies who have the ability to mine user consumption data. FMCG companies, beverage makers, automakers are catching up.

So far programmatic was restricted to digital advertising only. In the US, it has taken a leap from digital to television. A marketing and analytic software Turn has launched programmatic TV. It is a new tool to spot target audiences online and offline, across every device and channel.