In programmatic buying, there is distinction between human programmatic buying (HPB ) and artificial intelligence buying (AIB).
For instance, HPB would be a fixed amount of Rs. 400 on any visitor that visits an advertiser’s site in the last one month or 30 days. An AIB scores each impression autonomously. It uses predictive analysis. It bids a dynamic amount using a complex formula arrived at by factoring in several thousand factors including the site visit in the last 30 days. The other factors could be the weather, geography, the time of the day etc. The bidding formula itself and subsequent optimization decisions have been derived by algorithms, rather than by human input.
Programmatic acknowledges the movement of a consumer across the channels and touch points. Owned touch points are the marketer’s website, mobile apps, Fb page and email. Earned touch points are created by consumers themselves.
Programmatic buying is automated buying of ads based on data and targets. The ads could be display, mobile or video ads. Programmatic buying is accomplished through a DSP.
Data of interactions across devices, channels is consolidated on a single dashboard. This dashboard develops a unified overarching strategy to engage the audience. It increases effectiveness by assigning a value to each impression. It uses this value to avoid ad wastage by targeting non-interested people. Programmatic benefits the ad buyer, as well as the consumer, by giving relevant messages.
As a web page loads, it carries ad space that is available for RTB. The information about this web page and the user viewing is transmitted to the ad exchange. Ad exchange is nothing but a platform to auction off the available ad space to the highest bidder. The ad that wins in the auction will appear on the web page when its loading is finished. The auctions are conducted in milliseconds it takes for the web page to load.
The available ad space is also called an impression. Every time an ad appears it is called one impression. Some impressions are more valuable to certain advertisers or marketers, considering the content, relevance and likelihood of a click on the ad.
The price of an impression is decided by what the buyers are willing to pay in real time.
Advertisers use demand-side platforms (DSPs ) to enable them to purchase ad impressions. A DSP is a fully automated piece of software that bids on impressions from an ad exchange.
All this obviates the need to do the buying manually.
Ad inventory is the amount of ad space a publisher has available to sell to an advertiser. RTB bypasses a fixed sum of money set aside for a set period of time for a website. It enables the targeting of the relevant people across a wide range of sites. Budgets are managed in real time. It is a method to resolve the highly fragmented industry that advertising has become.