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Programmatic: Friend or Foe?

How do you know if it is time to switch from classic direct buying to programmatic media buying? We’ll fill you in on some topics that might help you make a decision for your business.

Why is everyone going programmatic?

The first thing we can say is programmatic is here to stay.

During the last few years, you might’ve heard a lot of talk around programmatic and its amazing features. Most top brands understood that they needed to be more efficient when running advertising campaigns. Besides saving time and money, the efficiency of programmatic is reflected in the planning, implementation, targeting, execution, reporting, and performance of each campaign.

Using programmatic can help you find your target audience with the combination of 3rd party audiences, 1st party audiences, and Google audiences. The catalog of audience options is amazing and practically infinite since you can mix your 1st party data with other audiences to make your own. We like to say that is the best part of programmatic—there is no more need for contextual or category targeting when we can target based on the user’s online behavior.

Programmatic at the beginning can be an uphill battle but once you reach the top,

 you’ll see that the effort was worth it.

What actually is programmatic? 

If you’re curious about this and this is the first time you are hearing about programmatic, well…here’s a quick summary for you.

Programmatic advertising is a system of automatic rules where there are different processes and transactions involved with purchasing ad spaces on websites or apps. Here are a few words and acronyms to get familiar with during this read: Demand Side Platform (DSP), Supply Side Platform (SSP), Ad Exchanges, Impression, and Private Marketplace (PMP). If you feel lost at this point we recommend reading this first and then come back.

How it works:

Programmatic allows advertisers to connect with the audience they’re looking to target using data and cookies from different providers like Google Audiences (Google Affinity and Google In-Market). These are only available for Google Platform’s Display and Video 360 and Google Ads. Also, there are 3rd party data providers like Bluekai, DataXpand, Lotame, Exelate, and many more that offer audience lists with a small additional cost to your CPM. These providers are also available for other DSPs like AppNexus, The Trade Desk and Mediamath. In case you’re asking, Display and Video 360 is Google’s DSP platform.

Once you connect the correct audiences for your digital campaign and set up the budget, starting bid, and flight dates, you have your programmatic campaign and the magic begins. The DSP and the SSP connect to ad exchanges that offer inventory and identify the user that’s behind that available ad space at that exact moment. If that user matches the target audience you selected and the CPM is correct with your bidding price, the buy occurs and that my friends is programmatic media buying.

Other benefits and uses?

You can also buy programmatically PMPs from different publishers available in the Google Marketplace from Display and Video 360. There are different types of negotiations; from Private Auction in which you are invited by the publisher as a VIP advertiser or demand partner to access the inventory for auction that is not necessarily available through a regular Open Auction to Preferred and Guaranteed deals, in which you negotiate a price with the publisher. Guaranteed deals is the only programmatic modality that secures a negotiated amount of impressions between the publisher and the buyer.

 

This actually consolidates all your favorite publishers in one DSP and guarantees better control and efficiency since you’re targeting your audience under the same campaign instead of having different efforts through different platforms. This is what we call the beauty of a unified digital mix where Google Marketing Platform and its tools allow you to have a harmonious media buy in just one place.

When not to use Programmatic/How could it be your Foe? Or Enemy?

Programmatic is like a new shiny toy and everyone wants to play with it, but are you sure you want to use programmatic media buying for your digital campaigns? Although our answer might be a strong YES, here are a few things to consider beforehand.

  • Do you already have a good rate of buying directly with other publishers?

If the answer is yes, you may want to reconsider and continue to directly work with the publisher since CPM prices can increase anywhere from 4% to 15% however, the benefits of using programmatic might be worth it.

  • Is your product cannabis, alcohol, or a casino?

There are a few factors that can impact your programmatic campaign if your product or service is related to any of the aforementioned products. Medicinal Cannabis is legal in some places, but not everywhere. Advertising Policies say you can’t advertise cannabis anywhere because even though it might be legal in your country, it is illegal in others so Google does not make any exceptions. For alcohol, only a few countries have permission to advertise it. Here’s the list provided by Google. Other DSPs like AppNexus (Now Xander) and The Trade Desk does allow alcohol advertising. For Casinos to advertise they need to be certified by Google but the context of the ad has to be appropriate for Google. Anything that suggests gambling and games with money or suggests you can win money is not allowed. 

  • So complicated that you need an agency?

For some, programmatic is not an easy task. In order to take advantage of all of its benefits, you need access to some tools that are actually a little hard to acquire and to understand the full potential. If this is your case, you do not necessarily need an agency. There are specialized and certified teams that work in Trading Desks that offer the service, like us, without having to go through all of the protocols some of the big companies and agencies require.

Where do we see Programmatic in a few years and how different we expect it to be

A few years ago talking about this subject so easily would have been insane. Nowadays, we unconsciously see programmatic everywhere. It goes beyond our personal use screens such as laptops, mobiles, tablets, and smart TVs. Now we see it at bus stops, elevators, and any other place where they can connect a screen to the internet. Imagine all the places that could be in the near future. That’s where we could see Programmatic in a few years. This is a new advertising channel called Digital Out Of Home (DOOH)

It is very important to highlight that every new change will make the whole advertising industry more efficient with the introduction of Artificial Intelligence (AI), Machine Learning (ML), and 5G. Nowadays marketers have more choices such as voice-activated ads, smart devices, and AR/VR that would provide a more engaging and personalized experience for consumers. We also expect to see more customized rules based on a target audience and more use of digital out of home combined with mobile location data.

So, it’s time to start embracing programmatic since this will be a relationship that will have no limits.