What is Programmatic Advertising?

Programmatic – a term that sounds little fancy with a lot of jargon around it, at times a bit confusing, even within the digital industry. Programmatic is a broad term that many people are using to categorize everything in digital advertisement. They define Programmatic right from behavioral and intent-based targeting to real-time bidding and exchange-based buying of ad inventory. Briefly stating, Programmatic is advertising’s newer, better mousetrap.

The Definition: Programmatic advertising is a process of buying and selling of online ads using software. Using an automated system to make media buying decisions instead of doing it manually, is known as Programmatic marketing.

A quick understanding:

• With Programmatic Marketing -“advertiser/brand” can create specific ad (message) and deliver to the right person, at the right time in the right context – using audience insights.
• Includes user’s online browsing behavior, information about users’ device, current location user is browsing from, and many such minute details.
• Decide on which publishers (blog/website) you want your ads to show on and how frequently.

This result with far more precision and personalization of ad messaging and media, resulting in more efficiently targeted campaigns. With this, you will ultimately pay only for highly effective ads, delivered to the right people at the right time with right message through an integrated technology platform (software/tools). It’s just different from traditional ad buying. No longer an advertiser agrees to run a fixed number of ads with a website(s) and is tied into the contract – which is less targeted and based on sheer volume (mainly of impressions).

Ads reaching right audience at right moment – wow! How is that possible?

The main reason is Data – Ability to use data in advertising makes all the difference. Yes, every single action that we do leaves a digital footprint, this is all stored and this can be used for advertising.

How is this user data collected?

Data about users’ online activity is collected through different mediums that include:

• Pixel (Tracking Code) installed on each website that user visits can determine many information like pages browsed, time spent, frequency, etc.
• Different types of cookies created on user’s device when user visits website
• Personal Information like age, gender, likes, interests & etc. from social media activities & social media profile data
• IP address, Geo-location, device & etc.
• Data that user fills in various forms whether it be email id or phone number, all are used.

What type of user data is collected?

Refer the below image to get a glimpse on types of data collected:

User persona or profile is created with this data that is further used to segment the audience into certain types. Folks with similar online behavior can be grouped together into one segment. Then, ad-tech companies make use of these segmented audience to show ad that cater to their interests.

How is relevant ads shown to the user?

• The brand/advertiser wants to show their Ads to specific type of audience that are their potential customers.
• They specify their rules or triggers which should be matched before the Ad is displayed. It filters through age group, interest area, gender and etc.
• The ad-tech tools are used where all the user activities are stored, to identify audience which matches all the specified rules/triggers.
• The pool of data available allows to anonymously target those individuals having similar needs and interests with quite relevant ads.

Refer the below exemplary image to further understand how collected data is being used to serve Ads.

(Here I’ve explained this concept at surface level; detailed version can be found in other articles on http://www.tejas.digital/blog/).

Please see: This article was originally published on http://www.tejas.digital/blog/what-is-programmatic-advertising/